Compare over 20 Leading Canadian Life Insurance Companies for best rates on Term Life Insurance, Whole Life Insurance.

Term life insurance provides insurance coverage for a specific period of time, with a premium or cost that stays the same over that term as well.   Generally, term life insurance is the most inexpensive forms of life insurance coverage in the marketplace.  The premium for term life insurance is based on the amount of coverage and the likelihood of death occurring during the term.  Term life insurance is the closest thing to pure insurance.  Term life insurance can usually be purchased from between $25,000 of coverage up to many millions of coverage, depending on a person’s circumstances.

Term life Insurance | Compare rates on term life insurance

Term life insurance is typically available for 1, 5, 10, 20, 30, or to age 60, 65, 70 or even to age 100.  The face amount of the term life insurance policy is the amount of benefits payable to your beneficiaries if you die within the period of the term.  Some policies include a double indemnity or accidental death benefit, which provides twice the face amount if you die accidentally.  Some term policies have a decreasing face amount, whereby the premium will remain the same each year but the face amount of the policy declines.  This is typical of mortgage term life insurance that is purchased with the mortgage through a lender.

Term life insurance only provides insurance coverage during the term period.  For example, if you purchased a 5 year term policy and did not renew it after the 5^th policy year, your beneficiaries would receive nothing if you died a day after the 5^th policy year.  This is definitely something to consider when looking at term life insurance, because the policy can end on you if you decide not to renew the coverage.  Another concern to keep in mind with term life insurance is if you happen to miss a payment and forget to notify the company they may cancel the insurance.  Then you would have to go through the process of reinstating you term life insurance, and this may require going through the medicals again.

Term life insurance is a “pay as you go” type of life insurance can make some consumers a little uncomfortable down the road.  Because there is a chance that a person can outlive the term life insurance, or they may not be able to afford the cost increase as they get older.  As we all know with term life insurance it can get very costly as we age and therefore can really make people worry.  Consumers also fear that the y may not be able to increase the term life insurance coverage down the road if there circumstances change.

Renewable and convertable term life insurance

A renewable term life insurance policy includes a clause that allows you to extend the term of your policy without having to go through a medical exam.  With some term life insurance policies you can renew the term life insurance up to the age of 90, which makes it almost like permanent insurance.  However, keep in mind you also have to pay the higher costs associated with each renewal period with term life insurance.  Make sure you read your policy for all the specific details on your term life insurance policy, as it will have a schedule of premium increases laid out.

Some term life insurance policies include a guaranteed insurability clause that allows you to purchase additional insurance without a medical exam or other evidence of insurability.  Generally, this clause will allow you to increase your term life insurance 5 to 7 times at specific points of time.  Typically, you can increase the term life insurance coverage starting at age 25 and every few years after that up to age 45.  A conversion provision would give you the option of converting your term life insurance into whole life insurance without the need for a medical exam.  With this conversion option, you would typically have to convert before the age of 65.  Also you can convert a portion of you term life insurance policy if you want, as you may not need as much term life insurance after age 65.

Cons of term life insurance

The largest concern with term life insurance is that, if you wish to maintain the same amount of coverage, your premiums will increase as you age, to a point where it will become almost impossible to keep the term life insurance in place.  However, most people do not require term life insurance into retirement as most or all of the major debts are paid off and looked after.  In retirement, people do not have those large debts like a mortgage to protect, so they do not need term life insurance.

The cost of term life insurance depends upon a mortality table that was used to determine the probability of death in any given year.  The table used for a specific policy may be based on the past experience of the insurance company and the policy holders they have on the books.  Insurance underwriters for term life insurance face a tough challenge with pricing term life insurance.  Especially when pricing term life insurance for older people, as the likelihood of them passing on is greater than those who are younger.  For this reason term life insurance is much more expensive for someone who is in the 60’s than it is for someone who is in there 30’s.