Which One to Choose?
Browsing the internet to find the best whole life insurance can be confusing. This article is a detailed comprehension of the two most common types of insurance and which one works the best for you.
Why do you need a life insurance?
Financial protection has become an inevitable part of our lives. There are several, we as humans, want to protect. Family takes the top berth when it comes to the list of things or elements we want to keep away from any kind of struggle or hardship. You might want to invest money in your child’s insurance to secure his future.
Life insurance in simplest terms is a contract to provide financial support to your spouse, parents or children, after your death. It is basically your savings to ensure that your loved ones get to lead the best lives and have enough money to pay for their own needs. While shopping for a life insurance policy, you might come across life insurance quotes or skyrocket rates that might put you off from buying one. Also, the realization that you would be dead one day can be horrifying.
Life insurance is important, as it offers you the peace of mind that if you leave this mortal world untimely, your family would have a non-taxable amount at the time of death. This helps your dependents in paying off the mortgage, credit card bills or any other expense.
Term or Whole Life Insurance: Which is Better?
There are two main types of life insurances:
Term life insurance offers limited time coverage. It pays a certain amount to your beneficiaries or nominees if you die, within the term you have chosen to be insured for. A reliable life insurance advisor in Ontario will help you in picking up the best term plan, suiting your needs, budget and keeping in mind the best plans that work for your family. If you, as a policyholder, have paid your premiums on time and die in an unforeseen event, the insurance company will release a lump sum death benefit.
Whole life insurance, on the other hand, covers you for the entire life, paid out to your dependents at the time of your death. Most whole life insurances need to be paid up in annual premiums. Also known as permanent life insurance, whole insurance often involves an investment or cash value component.
In the table below, we have articulated the prime differences between the two.
|Term Life Insurance||Whole Life Insurance|
|Who is it for?||Businessmen, young families, people with mortgage||Adults,|
|What does it work best for?||Temporary coverage from the sudden death of the policyholder||Lifelong coverage in the event of policy holder’s death Can combine coverage with tax-savvy cash value|
|Advantages||Inexpensive for young buyers Easy to understand||Continues even if the policy holder’s health fails Cost is almost guaranteed to never go up|
|Disadvantages||Offers temporary coverage Cost shoots up when you go for a policy renewal||Is a bit costlier|
Why one must choose term life insurance?
Term life insurance makes a great choice if you are looking for a pocket-friendly policy. Let’s say, your wife has just joined college and you want to ensure that her education and expenses are covered, in case something happens to you. Term insurances work great for business owners as well. Your workforce might have some important person who you need to get an insurance coverage for. As businesses experience unpredictable longevity and staff turnovers, getting a term life coverage is wiser.
Term life insurance works best for younger people in Ontario, who might not own multiple assets, but have high living expenditure, spread across home mortgage, credit card bills, car loans or child care.
Some people may ask, what’s the benefit of getting covered for a specific timeframe? The answer is- your term life insurance covers most of your temporary financial liabilities, which might include your outstanding mortgage or coverage for your children’s education. That’s why most term life insurances in Ontario are pocket friendly. You go to any life insurance company in Ontario to get term insurance and they will tell you to choose your coverage amount and coverage term. If you need help in determining the premiums you would need to pay, you can always reach out to an experienced life insurance advisorwho would help you in calculating the same based on your coverage amount and coverage term.
Certain life insurance companies in Ontario allow you to convert your term life into whole life insurance. To explore more, you can always rely upon Best Term Life Insurance.
Why is whole life insurance a wise choice?
Whole life insurance, also known as, permanent life insurance gives you coverage for an entire lifetime, paid out upon your death. One needs to pay annual premiums against whole life insurance. This might seem outrageous. However, the truth is these premiums are usually at a fixed rate regardless of your health. Certain life insurers in Ontario also allow you to pay the premium for a certain period (for instance, 20 years), and never have to pay again after that time.
Whole life insurance works best for people who are looking to ensure their estate planning with a policy. Someone who plans on donating a significant amount to a charity will find that whole life insurance is the best fit for them. As the policy is guaranteed until you die and not just for a term, whole life insurance assures that your dependents or beneficiaries will have secure financial security.
An added advantage to getting whole life insurance is that you can cash out the policy to fuel your retirement income or help pay expenses.
Talk to a Life Insurance Advisor in Ontario
If you’ve been put off and feel lost in the silos of life insurance policies being sold in the market, it’s best to reach out to a life insurance advisor. An advisor will help you in understanding all the available options that suit your circumstances. He/she will also help you in finding a policy that makes the most sense for you with its coverage & payment features. If you think, you need one, you can click here.