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Term versus Permanent Insurance – Finding the Right Fit for You

Updated: Mar 5

Each year we send our clients a review letter with a summary of the insurance policies they have with us. We hope each client will take a moment to revisit their coverage to ensure their financial situation and long-term goals are aligned with their coverage.

Life evolves, and so should your insurance coverage. Whether it's a new addition to the family, a change in employment, or a significant milestone, keep us informed so we can tailor your policies to suit your evolving needs.


Term Insurance

Term coverage is the least-cost way of handling a significant liability.

Debt: A car loan, mortgage, student debt or business debt are all reasons to obtain life insurance. Buying creditor protection like mortgage insurance often means that while the debt and benefit amount reduce over time, your premiums stay the same. Some solutions are also medically underwritten at the time of claim.

If you do opt for creditor protection, ensure that you read the fine print. Obtaining a separate policy to cover these obligations should you become an angel can be less expensive and allow you to control the terms of the contract more strictly.

New family members: If a spouse or child come into the picture, it could be time to ensure that if you passed away, adequate resources would be available to ensure that your children or spouse would have the means to continue living as they have been.

Dealing with a loved one’s death and scrambling to sell a house or make significant lifestyle adjustments in the face of a reduced income can be avoided with proper coverage.

Plans for the future: Clients often think about life insurance when their children are young, but forget about the future investments that they may want to make when their kids hit postsecondary.

Ensuring that you have coverage in place to allow for those future investments in children's futures means that they are secure in your hopes and ambitions for them.

Care for parents: The reality of our increased life expectancy is that some of our parents may become dependent on us financially. If your parents would have difficulty paying for retirement home or assisted living, you may want to consider that potential liability with your life insurance planning.

Remember that your current health status, health history, lifestyle, and family health history all impact your ability to obtain coverage that you may need to protect your loved ones through the seasons of life.

Permanent Insurance

Permanent insurance is suitable for permanent needs. While more costly, this type of coverage can ensure that premiums remain level for the duration of the contract. Certain policies can also be paid up within a pre-defined time frame.

Children: Parents are investing in permanent insurance for their children for a couple of reasons. The low cost at young ages as well as options to pay the policy in full in 20 years makes it attractive. In addition, purchasing coverage for children at young ages protects their insurability for their lifetime.

Young Adults: Permanent insurance is still inexpensive for young adults. While it is more important to ensure that their insurance need is met to protect their loved ones, it can be a good time to start building a component of lifetime protection for estate planning purposes or an alternative source of retirement – potentially in conjunction with term coverage.

High Net Worth Individuals: If you’re maximizing RRSPs and TFSAs, permanent insurance can provide an additional source of tax-sheltered investment room.

Seniors: As term insurance becomes more expensive in later years, some seniors like the idea of a low maintenance plan and increasing death benefit to keep up with inflation. Life insurance provides an immediate tax-free cash injection for loved ones responsible for taking care of last expenses.

There are many different types of permanent insurance, from basic term-100 to policies that limit your payment period. Each type of permanent policy offers distinct advantages. Depending on your goals, budget, and health situation, one option might be more suitable than others.

Our team is here to assist you with any adjustments or inquiries you may have. You are very welcome to use our online Booking Link to find a time that works for you.


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