There are basically two kinds of life insurance… term and permanent

Term insurance is like renting an apartment.

Most people have rented at some point in their lives. You pay your rent but will never own the apartment. Depending on your situation, this can be the best or only option at the time. If you decide in the future to purchase something permanent and move into your own home, you don’t take any equity with you. Like a rental agreement, term insurance expires at a specific year or age. Also similar to a rental agreement, term insurance premium payments are guaranteed for a given period of time, usually 10, 20 or 30 years, depending on the plan selected. At the end of that period, either the policy renews at a higher premium for the next payment period or it terminates.

Permanent insurance is like owning a home.

It’s not just about meeting an immediate need but also about making a decision to invest for your future. It may be more expensive than renting but you build equity with your mortgage payments. Plus, if you put money into the house through upgrades and renovations, you can further increase the value.  Like home ownership, there is an opportunity to increase the value of your policy through your premium payments and additional premium payments.

Term or permanent? Which is right for me?

To answer that question, you need to ask a few more. What is the purpose of the life insurance? What can you afford?

Do you want… Term Permanent

To pay off your mortgage and other debts?

✔

✔

To replace your income to provide for those who depend on you?

✔

✔

An option to accumulate tax-advantaged funds you can access1 for things like helping to fund a child's education or supplementing your retirement income?

x

✔

To create an inheritance for your heirs or favourite charity?

x

✔

To preserve an inheritance by covering final expenses, taxes and fees, keeping your estate intact for your heirs?

x

✔

To fund buy sell agreements, creditor, and key person protection for businesses?

✔

✔

Protection for the lowest cost?

✔

x

Protection for a specified time?

✔

x

 

Talk to your advisor about what insurance is right for you.

 

1  The cash value of the policy may be accessible via a withdrawal, policy loan or policy surrender and may be subject to taxation. A tax reporting slip may be issued.

Some restrictions and charges may apply.