When it’s time to get life insurance, it’s crucial to be aware of available options. It’s critical to understand how long your coverage will last, how much it will cost, and how much it will cover.
There are two main options in life insurance: permanent and term. Both will protect your family and you. However, they differ in terms of features.
In the case of term insurance, you get protected for the time you select. The price is less than permanent insurance initially. Still, it typically increases as you renew because premiums for insurance go up with age.
In contrast, permanent life insurance (also called Whole Life Insurance) is more expensive. Still, it does provide security and usually includes additional features. It is a lifelong insurance policy, and the insurance value could increase over time and have tax benefits.
How long is it expected to last?
Term life insurance
- It is possible to buy term life insurance for a specific duration. If your term expires generally, your insurance coverage will renew automatically, or you can change into permanent insurance without asking additional health-related questions.
Permanent life insurance
- If you pay your premiums, you’re assured protection for life. The coverage you have will be affected should you modify your policy or withdraw.
Cost
Term life insurance
- At first, it is less expensive than permanent life insurance. However, it will increase each time you renew your policy.
Permanent life insurance
- It could be higher because you’re paying for life insurance. However, you’ll have more options to boost the death benefit.
Benefits
Term life insurance
- The person (or the people) you select receives the tax-free cash when you die. They can use it in any way they wish – for example, to help pay off loans, settle the mortgage, or send their children to school.
Permanent life insurance
- The person (or the people) you select will receive tax-free funds after your death and may use it in any way they like.
- It will increase in value over time. You’ll have unlimited access to this money for as long as you live, and you can spend it as you want.
- You can withdraw funds from your insurance policy, but the payout upon your death will be smaller.
For more information, you can call Ottawa Life Insurance at (613) 454-1424 or email us at info@ottawa-lifeinsurance.ca.
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