The primary purpose of life insurance is to reduce the risk of financial loss due to the death of an individual and to provide financial compensation to family members, business partners, charities or other beneficiaries at the time of the insured’s death.
There are different choices available for insurance protection, and the right coverage depends on the individual. It is always best to explore your options with a financial advisor to help you select the coverage that is right for you and your family.
What life insurance options are available to me?
As the name implies, term insurance is available for a limited period of time, or terms. These terms can be 1, 5,10, or 20-year increments and available until you reach a certain age. This type of life insurance is intended to provide maximum coverage for the lowest initial premiums with rates remaining the consistent for the length of the term. Rates are re-calculated at the end of each term and based on your current age.
Guaranteed renewable and convertible term insurance allows you to renew your policy regardless of your current health situation. You can also convert portions of your term coverage to permanent insurance without additional medical underwriting and lock in the premium rates for the remainder of your life.
Permanent insurance also known as cash value life insurance is designed to provide stable protection throughout your entire lifetime. Permanent insurance is available in two types, each with unique features and benefits and should be considered a foundational product in either your personal or business planning.
Permanent Insurance is available in 2 types:
Universal life insurance differs from term insurance as it allows you to build up equity within the policy. There are several investment opportunities ranging from conservative to aggressive,
and investment purchases should be done based on your comfort level of risk and reward and account balances can fluctuate based on market performance. The investment portion of these accounts can accumulate tax deferred within guidelines set by Canada Revenue Agency. Premiums may be adjusted due to performance of the underlying investments.
Whole life insurance offers the greatest number of guarantees and advantages over other types of insurance. Initially the premium is more expensive than either term or universal life insurance, however the rates are contractually guaranteed to never increase and provides the greatest level of security for a person’s entire lifetime. Unlike universal life investment accounts, once a policy holder has been paid a dividend or interest, the amounts can never go down regardless of market conditions.
Protect your loved ones and those around you with a comprehensive life insurance policy. Speak with Synergy Life Financial today to determine what policy type is best suited to you. You can rest easy knowing that you’ll get our expert advice, and a policy that financially protects the ones you hold dear.