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LIFE INSURANCE

Life Insurance is used as protection in the event of death and provides peace of mind, knowing that your family or business will not experience added financial burdens during an undoubtedly difficult time.  Life insurance pays a lump sum benefit, tax-free to a named beneficiary (for pennies on the dollar), upon the death of the insured. Proceeds can be used for:

  • Final Expenses – funeral, terminal taxes
  • Debt Elimination – e.g. mortgage, line of credit, car and student loans
  • Income Replacement – for surviving spouse
  • Continuity – e.g. education funding, charitable donations, etc.
  • Estate Creation – creating wealth and leaving a legacy for beneficiaries
  • Estate Preservation – e.g. capital gains on vacation or rental properties

THE INSURANCE SPECTRUM

  • TERM INSURANCE 33% 33%
  • UNIVERSAL LIFE 66% 66%
  • WHOLE LIFE 100% 100%

TERM INSURANCE

  • Temporary coverage e.g. Expiry at age 85
  • Premiums guaranteed increments e.g. 10, 20, 30 years or duration can be customizable with some insurers
  • Lowest premiums initially (the biggest bang for your buck), but may not be the best long term plan, premium and coverage wise
  • Straight death benefit/risk charge (no cash values)

UNIVERSAL LIFE

  • Can be permanent coverage
  • Moderate premiums, can be level and guaranteed
  • Hybrid of Term and Whole Life Insurance,
  • Straight death benefit/risk charge PLUS cash values if overfunded
  • Investment options available for excess cash value
  • Death Benefit = Life Insurance + Cash Value

WHOLE LIFE

  • Permanent coverage
  • Premiums are level and guaranteed. They are the highest initially but at times the best long-term value
  • Includes cash values – guaranteed and dividend (non-guaranteed, based on the dividend scale of the insurer)
  • Dividends can be applied in various ways e.g. Guaranteed Enhancement (best value/lowest premium), Paid-Up Additions (highest cash value accumulation)
  • Non-forfeiture options (living benefits) – policy loan, premium holiday, reduced paid-up insurance, premium offset
  • Death Benefit = Life Insurance – (Loan Outstanding + Interest Owing)

Sample Term Insurance Premiums

*Note: Rates shown are based on quotes prepared on August 18/2021 with a major competitive Canadian financial institution. For illustration purposes only (any duration up to age 85 can be chosen) E&O excluded.

Sample Term Insurance Premiums

*Note: Rates shown are based on quotes prepared on August 18/2021 with a major competitive Canadian financial institution. For illustration purposes only (any duration up to age 85 can be chosen) E&O excluded.

THE COST OF WAITING

Premiums increase, on average, by approximately 8-12% each year that you postpone purchasing a life insurance policy.