subject: Insurance Broker Canada | Evaluation Of The Types Of Life Insurance Accessible In Kelowna [print this page] Learn the different types of life insurance to choose from. When you are to shop for insurance in Kelowna you should really understand the four basic types of life insurance available. This article will give you a brief and clear understanding of the four major types of life insurance you might buy, the differences between policies, and the advantages of each.
You should keep in mind that the type of life insurance you buy today need to solve your immediate risk needs (how much financial risk are you and your family exposed to) and be flexible enough to adapt to your changing needs in the future. This article will not answer all your questions, but it can be a good overview, and you can always dig through our Kelowna website to find out more about the different types of life insurance.
Term Life Insurance
Term life insurance is the fundamental form of life insurance in Kelowna. It is also the most economical. With term life insurance you are in effect renting your risk protection for a certain number of years (the term of the policy). The price is determined by the likelihood that you might die within that term. The term number of years on policies is usually 10 or 20 years, but you can also buy policies with a 30 year term. The longer the term you buy today, the more expensive the policy will become.
At the end of the term (say after 10 years on a Term 10 policy) your policy will automatically renew. That is, the price of your policy will get too expensive and you will have the choice to keep the policy or not. The new premium at renewal is very excessive, and much more expensive than buying a longer term insurance contract today. If you bought a Term 10 policy, and kept it for 20 years, paying the higher premium for the last 10 years, you will probably pay more than twice the cost than if you just bought a Term 20 policy today. So, when buying Term Life Insurance, buy the term you need today and it will save you money.
Term life insurance is best used for protecting for short term needs, like paying down a mortgage or the financial cost of raising children. Your temporary or short term financial risks are most affordably covered with Term life insurance.
Term 100 Life Insurance
Term 100 life insurance is different than normal term life insurance. Term 100 is actually a permanent life insurance policy because it will be for you for the rest of your life, and will pay out a death benefit. Most Term 100 policies in Kelowna don't have cash value hooked up to them (some do have a cash value component to them but are more like whole life insurance). The premium or price for Term 100 life insurance is level for the rest of your life so the price you pay today will be the price you pay forever, no matter how long or short you live.
The advantages of Term 100 life insurance are that it is cheaper than most traditional permanent life insurance policies. You do not have to spend as much money on premiums, which allows you to invest into other products like RRSPs and TFSAs. If you are seeking for something permanent, simple, affordable and which does not act like an investment policy, check out Term 100.
Universal Life Insurance: Growing in Complication
Universal life insurance is the most flexible and most advanced type of life insurance in Kelowna. It offers you many choices to design a policy that will perform for you just the way you want it to. You can choose either increasing premiums or level premiums for life (like a Term 100 cost inside your universal life policy). You can put in additional money into the policy fund, up to a prescribed maximum, and get tax sheltered growth. You can also select the types of investments you would like to have inside your policy fund, similar to designing a mutual fund portfolio.
The advantage with universal life insurance is that it has the potential to carry out very well, if market returns are strong. There is also risk that losses in the investment markets (which your policy fund is attached to) will lose you money and you may need to pay more premiums later in life. If markets work well over the long term you would see a large tax sheltered profit inside your universal life insurance policy. It therefore acts as both risk protection and a long term investment plan.
Whole Life Insurance
Whole life insurance is the oldest and most traditional type of life insurance policy in Kelowna and across Canada. Whole life offers you a set and assured premium for the rest of your life, or you can quick pay the policy in 10, 15 or 20 years. There is a guaranteed cash value inside the plan so you know it will always have equity for your premium dollars invested. Whole life insurance also pays dividends (like profit sharing), so you will have a higher cash value than the minimum guarantee, and you may even have a growing amount of life insurance.
Whole life insurance offers people in Kelowna a strong, stable and proven long term performance investment policy with guarantees. The cost for whole life insurance is a bit higher, but you can ensure that you will never risk your money, will always have equity and you will never pay more: simple, straightforward and guaranteed with the longest history of strong investment performance in Canada.
Life Guard Insurance can assist you pick the type of life insurance that is right for you
Call us, and we will connect you with a professional life insurance broker in Kelowna who can discuss with you the different types of life insurance, and guide you design a plan to meet your desires and your budget.
by: Mitch Reynolds
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