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Best Life Insurance Plans in Ontario - Term vs. Permanent
When it comes to choosing life insurance in Ontario, understanding the difference between term and permanent life insurance is important.
In defining what the best life insurance plan is, there is no one-size-fits-all answer. This is because people’s needs and financial situations vary. What may be the best policy for one person could be unsuitable for another simply because their circumstances are not the same.
In this section, we will present permanent and term life insurance, their features, and costs to give you a clear understanding of your options.
These 2 types of life insurance target different needs and financial goals. Let’s begin by breaking down their distinctions.
If you want to get actual quotes to compare, please fill out the short online form on this page at NO COST!
Understanding Term Life Insurance Benefits
Term life insurance is a type of life insurance policy that provides coverage for a specified period, typically from 10 to 30 years.
It is a financial shield during critical phases of life such as home ownership, setting up a business, marriage, parenthood, etc.
During this term, if the policyholder dies, the beneficiaries receive a fixed death benefit as specified in the policy. However, once the term expires, the coverage ends, and beneficiaries will receive nothing.
This is the cheapest type of life insurance. Thus, it is not surprising that many people who want life insurance protection buy term life insurance.
Again, death benefits (cash benefits) are paid only when the insured individual dies during the term of the policy.
Key Features of Term Life Insurance
As mentioned earlier, term life insurance is very popular and for good reason. Below are the key features of this type of life insurance.
Affordability: Term life insurance is the most affordable option, being 5 to 10 times cheaper than permanent life insurance.
The lower cost of term life insurance makes it an attractive option for a great number of individuals.
Simplicity: This form of insurance is very simple; pay the premium for the duration of the term and your loved ones get guaranteed death benefits if you die within the term.
Renewal option: Many term life insurance policies can be renewed at the end of the term. If you have an existing policy that is expiring soon and you want to continue your coverage, you can request the renewal of your coverage. However, the premiums will be higher because of your increased age. If you developed health conditions since you first got the policy, your insurer will assess the risk before approving your coverage.
You can also convert your policy from term to whole life insurance but the premiums will be much more expensive for lifetime coverage.
No Cash or Surrender Value: Unlike permanent life insurance, term life insurance policies do not accumulate cash value with the primary focus on death benefits.
If your policy’s insured amount is $100,000, that is the guaranteed payout and will not increase except if you request for a higher amount during the term.
If you decide to cancel your coverage or surrender your policy, your premiums will not be refunded.
Level Premiums: The premiums for term life insurance will stay the same throughout the term unless you increase the desired benefits.
Who is Term Life Insurance for in Ontario?
Term life insurance is most advantageous for certain demographics and situations in Ontario.
Below are the groups for whom term life insurance tends to be the most suitable option:
- Young Families: Parents with children often find term life insurance ideal to secure their family’s financial future. In the unfortunate event of a premature death, the death benefit can cover living expenses, children’s education, and other financial obligations.
- Homeowners with Mortgages: Individuals with a mortgage may choose term life insurance to ensure that their loved ones can pay off the mortgage in case they pass away. The death benefit guarantees the surviving family members are not burdened with mortgage payments. Most mortgage lenders require mortgage insurance and term life insurance is a practical option for this purpose.
- Individuals with Temporary Financial Obligations: Individuals with specific financial obligations such as student loans or car payments can benefit from term life insurance. It provides a safety net that can meet these financial commitments if the unexpected happens.
- People who need coverage at a low cost: For those looking for affordable life insurance, term policies offer lower premiums than permanent life insurance. This makes it easier for individuals on a budget to secure essential coverage without straining their finances.
- Young Professionals: Individuals just getting started on their careers and may have lower incomes still need life insurance to protect their future financial responsibilities. Getting coverage at a younger age will guarantee low premiums for the duration of the term. They may not need it now, being single and without significant debts, but that can quickly change in just a few years.
- Individuals who want no-fuss insurance: Many people just want coverage without the bells and whistles. They simply want a predetermined amount to cover funeral costs in case they die, or guarantee funds to pay off significant loans. This type of policy is straightforward and easy to understand.
Term life insurance offers uncomplicated coverage for individuals who want straightforward coverage at a lower cost. It is a great option for people with short-term financial obligations and those looking to protect their dependents during critical life stages.
What is Permanent Life Insurance: Who is it for in Ontario?
Permanent life insurance provides lifelong coverage to protect the financial security of your loved ones in the event of your passing. This type of life insurance offers so much more than death benefits, making it an indispensable financial tool for many families.
Aside from death benefits, permanent life insurance has cumulative cash value; it means the policy accumulates savings over time. You can borrow against cash value if you ever have an emergency.
The following groups could benefit significantly from permanent life insurance:
- Individuals Seeking Lifetime Coverage: One of the best things about permanent life insurance is its lifetime protection. It is ideal for those who want the assurance that their beneficiaries will receive a death benefit regardless of when they pass away. This security can be especially comforting for older individuals planning for their estate.
- Individuals with dependents: Those who have children or dependents can benefit from permanent life insurance. Support and financial protection are guaranteed for their loved ones if they pass away.
- Wealth builders: Individuals who are seeking to accumulate cash value over the long term will appreciate the investment component of permanent life insurance.
- High-income individuals: People with higher disposable incomes can choose permanent life insurance as a financial tool. They can secure lifelong coverage with premiums that stay level for life. Higher premiums won’t be a burden to pay for people who earn a lot of money.
Anyone thinking of permanent life insurance must evaluate his financial goals, financial health, and needs. Our insurance partners can help you assess if permanent life insurance is the right fit for you.
Compare Permanent Life Insurance vs. Term Life Insurance
Compare term life and permanent life insurance to see their unique characteristics, quality of coverage, and cost to see which one is right for you.
| Term Life Insurance | Permanent Life Insurance | |
Duration of coverage | Predetermined term | Lifetime coverage |
Payout | If the insured dies within the term | Guaranteed regardless of when death occurs |
Cash Value/Surrender Value | None | Accumulates during the life of the policy |
Medical exam required | Yes, except for simplified issue which requires only a health questionnaire and no medical exam insurance | Yes, except for simplified issue which requires only a health questionnaire and no-medical exam insurance |
| Cost | Typically cheaper premiums, depending on the type of policy and insurer | Typically 5 to 10 times more expensive |
What are the drawbacks of term life insurance?
You have read in the previous section about the advantages of term life insurance. It is cheaper, flexible, and offers financial benefits to your dependents if you pass away.
But what are its drawbacks?
- Limited duration of coverage
- Higher premiums at renewal
- No cash value or surrender value
Term life insurance has its pros and cons. You need to weigh them against your personal circumstances. In the end, having insurance protection, even if limited in coverage, is better than none. Keep in mind that you can convert term life insurance to permanent life insurance at any time if your finances improve.
What are the drawbacks of permanent life insurance?
Permanent life insurance is a great insurance option but it does have some drawbacks that you should consider.
- Higher premiums: Permanent life insurance costs a lot more than term life insurance.
- Complicated: Some permanent life insurance policies can be difficult to understand due to their investment component.
- Slow cash value growth: If you are looking to grow wealth quickly, permanent life insurance may not appeal to you. It takes years for cash value to build significantly.
- Surrender penalties: If you cancel or surrender your policy, certain charges may be deducted from the cash value of the policy.
The choice between term life and permanent life insurance should be based on your financial situation, lifestyle, and future goals.
Feel free to consult our insurance partners by filling out the short online form on this page. Receive FREE QUOTES to compare and find the best life insurance for your needs.
Term Life 100: A cross between Term and Permanent Life Insurance
Despite the word term in its name, Term Life 100 is a unique type of permanent life insurance. It offers lifetime coverage with special features that could match different financial goals.
The insured is protected for life as long as the premiums are paid. While traditional term life insurance covers only a set period, term life 100 provides a guaranteed payout to beneficiaries if the insured dies, regardless of when it happens.
Premiums for term life 100 are constant throughout the duration of the policy. Unlike other permanent life insurance policies, Term Life 100 is simple in structure and focuses on death benefits rather than accumulation of cash value or investment. The premiums are also cheaper than other permanent life insurance policies.
One very important thing to know about Term Life 100 is that it does not accumulate cash value. You can’t borrow funds against the policy.
In short, if you want lifetime coverage but can’t afford whole life or universal life insurance, Term Life 100 may be the ideal option for you. If you reach 100 years of age, your premiums stop but your protection continues!
Which insurance companies in Ontario offer Term 100 Life Insurance? To name a few, you may consider RBC Insurance, BMO Insurance, Empire Life Insurance, Manulife, and TD Insurance.
Request free and no-obligation quotes for Term Life 100 from our reputable insurance partners today!
Get the lowest premiums for life insurance in Ontario
Are you protected by life insurance? There is no better time than now to secure the future of your loved ones.
It is smart to review your insurance coverage to make sure you have sufficient insurance benefits to cover your family’s needs and financial obligations.
Find the best prices for term life or permanent life insurance in Ontario. Our partner brokers are happy to shop for the lowest premiums tailored to your situation!
Whether you want term or permanent life insurance, you can save time and money by buying life insurance through our reliable and experienced insurance partners.
Fill out the short comparison form below to receive competitive quotes at no charge from top life insurance companies in your area.
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Compare Different Life Insurance offers and select the Best, simply by filling out the from below
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