Life Insurance 101: What’s the Difference?
In Canada, there are three categories of life insurance. Here’s a brief summary of each:
- The cheapest option (but only initially, during your policy “term”)
- Payments (your policy “premiums”) are a fixed amount that you can choose to pay monthly, quarterly, or annually
- The premium usually increases exponentially after 10 or 20 years, making it more expensive in the long run
- The most expensive option
- Premiums are a fixed amount that you can choose to pay monthly, quarterly, or annually
- The premium usually stays the same over your lifetime. Some policies allow for pre-payment or additional deposit options
- There’s an investment account inside the policy where your money grows (often tax exempt). Sometimes these policies also pay dividends
- Costs somewhere between a term and whole life policy
- Premiums are flexible (you can pay monthly, annually, one time, and even take breaks in paying without losing your policy)
- There’s an investment account inside the policy where your money grows (often tax exempt)
If you have questions, please ask us! Depending on your timeline and budget, we work with you to figure out what type of life insurance best meets your needs. You can learn more about that process here.