Let us take a closer look at Term life insurance in Canada.
This policy has a lower initial cost, but the premiums are only stay the same for a stated term – usually 10 or 20 years. The cost increases dramatically after the term ends. If you don’t renew it your coverage ends and your premiums are gone.
By contrast the initial premiums for a Permanent Insurance are higher than Term Insurance but your cost remains level. You also have coverage for your lifetime and depending on the plan it may generate a cash value. It’s crucial if you do choose a term plan that the coverage is convertible to a permanent plan without a medical but even than your premiums are based on your age at the time of conversion.
To get back to our analogy with shoe shopping, ask yourself - would you buy a cheap pair of shoes that didn’t fit just because they were on sale? The answer is undoubtedly “No”. You wouldn’t get enough use out of them to justify the cost and they would probably cause more trouble than good. It is not to say that Term Insurance can’t be a good fit, in fact in some instances it can but too many times it’s sold simply because it’s a cheap and easy sell.
One last point when shopping for your life insurance is to be sure that you work with a life insurance broker Toronto who offers a full section of companies and products. To go back to the shoe analogy one more time – you want a store lined with a wide variety of brand names, styles and sizes. Don’t let your local “captive” agent put you in a size 8 term policy – take the time to work with an independent broker who can create a custom fit that will serve you well for years.
Tags: Insurance