Life Insurance financially protects your family even when you’re no longer there to support them.
Life Insurance lets you leave them a tax-free amount when they need it the most. With life insurance, you can live with peace knowing that through that difficult time your loved ones can spend more time helping each other, and not worrying about how to pay the bills. Life Insurance can cover your debts, funeral costs, taxes due on death, mortgage payments, everyday expenses, and much more. It can replace your monthly salary as well.
Types of Life Insurance policies
There are many different ways a Life insurance policy can work for you. It is not only to protect your family but it can be a part of your long-term financial planning as well. You may be able to access money in your policy while you are alive. If needed you can access the cash value through partial withdrawals, policy loans, or loans with any other financial institution.
Several insurance companies in Canada offer many different types of life insurance policies such as:
Term Life Insurance
Term life insurance is temporary life insurance that provides a lump-sum tax-free benefit to beneficiaries if the life insured dies within the fixed term of the contract. The most common terms for life insurance are 5 years, 10 years,20 years, or to a specific age (e.g., to age 65). However, you can also pick any term from 10 years to 40 years depending on the insurance provider. It is most suitable for those who need insurance for short term needs or those with long term needs but has a limited budget
This is the most affordable solution available in the market
Term life insurance may be convertible to permeant insurance without the evidence of insurability
It can be renewed after the expiry of the term but premium rise with renewals and may eventually become unaffordable
Term-100 life insurance
Term-100 life insurance also provides coverage for the entire lifetime of the life insured, but the policy matures at age 100, such that premiums are no longer payable. T-100 policies typically do not have a CSV. This is the most cost-effective way of getting permanent insurance. These can be paid up in a limited time for example in 10, 20, or to age 65.
Whole Life Insurance
Whole life insurance provides coverage for the entire lifetime of the life insured, with a premium that typically remains level throughout the contract. A whole life policy builds up a cash surrender value (CSV) over time, and if the policyholder surrenders the policy before the death of the life insured, he may be entitled to receive payment of that CSV, less any surrender charges, if applicable. These are also called money-back life insurance plans. Whole life insurance policies are classified as either non-participating or participating policies
Whole life insurance plans offer guaranteed fixed level premiums which are payable for 10, 20 years, or to age 100
Whole life insurance policies offer guaranteed cash value
Cash value grows tax-deferred over the years
If needed, you have access to a long-term source of cash thanks to the cash surrender value of your contract.
You can choose dividends to; receive in cash, to accumulate in cash value, to buy a small amount of term life insurance, to buy additional permanent insurance, or to use to pay future premium
Universal life insurance
UL insurance combines permanent insurance with tax-advantaged investing, within limits. UL insurance is considered to be the most flexible type of life insurance because the policyholder can modify the policy in various ways in the future. Universal life insurance is most suitable for those who have long-term insurance needs and who are also looking for tax-advantaged investment opportunities.
Exploring your options
Policyholder can increase, decrease or even suspend premiums, as long as the policy’s account value can support the mortality and expense deductions
The policyholder of a UL policy can choose from different investment options available and gets a clearer picture of how the investments held within the policy are performing.
UL policies offer the opportunity for tax-sheltered investing, within limits.
You can withdraw or borrow against your policy should the need arises
As each Life Insurance Policy is different in terms of assets, guaranties, and financial liabilities, so always purchase life insurance with the guidance of an Expert Insurance Advice.
At Handy Insurance, we can help you understand your options and figure out how much and what kind is right for you. We conduct a need analysis to assess your particular risks and exposures and recommend a specific insurance product at the most affordable price.
Answer Questions Truthfully
Your life insurance policy is an agreement between you and your insurance provider which includes providing personal information, so your policy accurately represents you and your lifestyle. This information includes your age, gender, Health History, Family Health History, Smoking or non-smoking status, hobbies, & your occupation. Remember your insurance agent needs to know and understand the real you, so you can be fully protected. For example; any dangerous hobby or your smoking habits can change your risk category and may impact your premium or insurability.
Always share the required details on Life Insurance Policy with complete honesty. Inaccurate information can negatively impact your claim payments.
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