What is it?

 

Life Insurance is a guaranteed contract between you and the insurance company. The insurance company promises to pay a lump-sum of money in the event of your death. You as the policy holder maintains the policy by paying premiums

 

 

 

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LIFE INSURANCE

 

(monthly payments) for the coverage. In the unfortunate event of your passing, your beneficiaries would receive the lump-sum amount.

 

Why do you need it?

 

Death is a very difficult subject to talk about let alone plan for. This is where life insurance can help give you the peace of mind when it comes to knowing that your loved ones are not burden by financial hardships in the event of your passing. Your beneficiaries can use the money to help with:

 

• Funeral expenses

• Debt repayment on your behave such as an outstanding mortgage

• Paying for education costs

• Paying for day-to-day expenses

 

What are the different types of life insurance?

 

Life insurance can be categorized into two basic classes – permanent (whole life and universal life) and temporary (term life).

 

Temporary or term life insurance:

 

This type of life insurance is ideal for young individuals who are seeking coverage for a limited period. This type of coverage is right for young adults, couples, or young families.

 

Key features of term life insurance:

 

• Lump-sum and premiums are guaranteed for the term of the policy

• Your payment (premiums) are determined by the amount insured and your overall health at the time

• Options are available for you to renew or convert your term insurance to permanent coverage.

• Multiple people can be insured under one policy

 

Whole life insurance:

 

Whole life insurance would be suitable for individuals seeking financial security and stability for loved ones in the event of a premature death.

 

Key features of whole life insurance:

 

• Policies usually come in pre-determined lengths of time which can be anywhere from 10 to 100 years.

• Both lump-sum and premiums are guaranteed for the term of the policy.

• Guaranteed cash surrender values

• Your payment (premiums) are determined by the amount insured and your overall health at the time

• Multiple people can be insured under one policy

 

Universal life insurance:

 

Universal life insurance works very similarly to Whole life in terms of lump-sum payments to your loved one however; it also has the added benefit of being a tax-shelter.  This type of coverage would be suitable for young dual-income professional couples that can pay the premiums much quicker, persons with higher than average income who are looking for another tax-shelter vehicle other than an RRSP.

 

Key features of universal life insurance:

 

• Affordable permanent life insurance protection with added benefit of a tax-sheltered savings account.

• The flexibility to modify amount insured, payment frequency, and premium amount according to your needs.

• Diversify savings through various investment options

• Ability to make partial withdrawals from the savings account

• Multiple people can be insured under one policy

 

 

 

 

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