What is term life insurance?

What is term life insurance?

This is temporary protection that provides tax-free payment to the people or charities you have designated as beneficiaries in the event of your death during the period you choose. The money can be used to pay bills, pay off the mortgage, pay for the children’s education, or keep your business running.

The payments to be made, called premiums, are fixed for the duration of the protection you choose and will not change during this period.

What is the difference between term and permanent life insurance?

There are two life insurance options: term and permanent. Term life insurance protects for a specific, pre-determined duration, while permanent life insurance provides lifetime financial protection.

Depending on your needs, you can choose the accessibility of our term life insurance, used most often to meet short-term needs (eg mortgage), or the lifetime protection and cash value offered by most permanent life insurance products.

Consider these key differences before making your choice.

  1. Period of insurance. Our term life insurance offers protection for 1, 10, 15, 20, 25, or 30 years, as well as great flexibility. Permanent insurance, which includes whole life insurance and universal life insurance, provides you with financial protection for life, as long as the contract remains in force.
  2. Premium. Initially, the premiums for term life insurance are lower than those for permanent life insurance. However, they usually increase with each renewal, while those for permanent life insurance do not change*.
  3. Redemption value. Most permanent insurance products include a savings portion called cash value, which accumulates as you pay into the policy. You can cash it in or borrow from it, and use the funds as you see fit. Term insurance does not include any savings portion.
  4. Convertible contracts. You can convert your term insurance contract into a permanent insurance contract. Permanent insurance contracts are not convertible.
  5. Death benefit. All of our insurance products pay a death benefit if the contract has not expired and remains in force upon the death of the insured.

Which option is right for you?

If you’re primarily looking for an affordable product, the monthly premium for term life insurance costs less at first. Term 1 Life even offers a one-year term, guaranteed to renew.

If you’re looking for the best overall solution for you and your family, you don’t have to choose between term and permanent life insurance. Often it makes more sense to combine the two options. The key is to find a solution that meets your needs for insurance and duration of protection.

If you have any questions about life insurance, contact your financial security advisor. He will be happy to discuss your insurance needs with you and suggest solutions. Have you thought about finding the balance between life insurance and investments? Together, these two products provide you with complete financial security.

* The number of premiums to be paid for universal life insurance may change at the client’s request.

If you’re primarily looking for an affordable product, the monthly premium for term life insurance costs less at first. Term 1 Life even offers a one-year term, guaranteed to renew.

If you’re looking for the best overall solution for you and your family, you don’t have to choose between term and permanent life insurance. Often it makes more sense to combine the two options. The key is to find a solution that meets your needs for insurance and duration of protection.

If you have any questions about life insurance, contact your financial security advisor. He will be happy to discuss your insurance needs with you and suggest solutions. Have you thought about finding the balance between life insurance and investments? Together, these two products provide you with complete financial security.

* The number of premiums to be paid for universal life insurance may change at the client’s request.

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By Cary Grant

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