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Understanding Life Insurance

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Understanding Life Insurance

Life Insurance

If you do not have a life insurance policy, you have probably considered getting one. You always hear commercials about life insurance and how important it is to have. There are some things you should know when you are thinking about purchasing life insurance for yourself. There are many different policies to choose from and speaking with your local Canadian life insurance broker will help give you the answers you need.

What is Term Life Insurance?

Term life insurance is a policy that is available for purchase and is often chosen by many people because it is very affordable. The price on these policies make them very lucrative to people and you will receive decent coverage.

Your term life insurance policy will have an end date to it unlike some of the other options. The term end date is chosen by you as you pick how long you want the policy to last. There are different intervals of time ranging from 5 years all the way up to 30 years. When the life insurance policy is short, the price is also substantially lower. So why are the rates so low? Think about it. If your plan is only open for 5 years, what are the chances that something will happen to you in that time frame? The odds are minimal.

Once your term life insurance comes to an end, you will often have the choice of renewing the policy. Although you do not have to renew the policy, many people will.

What is Whole Life Insurance?

Whole life insurance is a type of life insurance that is considered a permanent plan. This policy will last from the time it is purchased until the owner cancels the plan or passes away. These plans can be very expensive as they do last throughout your lifetime and never expire. These policies will often allow you to cash out against them as well and offer a payout.

Whole life insurance policies are beneficial to purchase when you are younger in age because the premiums are often lower due to your age. If you do choose to purchase a policy at a young age, you should definitely purchase a permanent plan because insurance companies will lock in the rates for you and you will never experience a price increase.

What Are the Benefits of Purchasing a Life Insurance Policy?

There are many benefits to purchasing a life insurance policy that you may not have thought about. Consider these benefits while you are contemplating purchasing a plan:

  • Your family will be taken care of
    A life insurance policy will help to take care of any expenses that are lost when you pass away. If you family is used to relying on your income, it can be a hard adjustment when it just disappears. An insurance policy will guarantee that your family is cared for and taken after once you are gone.
  • It will help pay your debts
    Once you pass away your debts and other money owed becomes your family’s responsibility. If they are not prepared for this then it can cause a huge burden on them. Often times, they are responsible for paying your debts and such before they can receive access to your bank accounts and the like. This can cause problems if they need to access any money. Your life insurance policy will cover the outstanding debts and your family will not be left wondering where to get the money.
  • Preparing for a funeral can be expensive
    Funerals and burial services are expensive and even if you have set some money aside, it may not be enough. Your life insurance policy will allow your family to cover the cost of your funeral and burial without any worries.
  • A life insurance policy will secure your family financially in other areas
    A life insurance policy is beneficial because it can help with other financial goals. These can include college, business capital, and similar. Once you have passed away, the beneficiary can set aside money for these financial goals.

It is important to consider a life insurance policy because it will help protect you and your family should something happen to you. You would never want to leave your family without any options and these policies can help secure your family’s future.

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