Types of Insurance: Determining Your Life Insurance Needs

+Life Insurance is designed to handle the “What ifs” in life. Once a policy is approved, you pay a monthly premium to the insurance company and they in turn take on the risk by agreeing to pay an agreed upon, tax free, lump sum in the event the insured dies. Life insurance is an intregal part of financial planning and those who still have young children and debt should take a serious look at getting some coverage in place whether you live in a big city like Toronto or a small town. 

What kind of insurance is best for you and your family? 
There are basically two types of life insurance policies: term life insurance and permanent life insurance. Term policies are the more economical option compared to its more expensive counterpart: 

1. Time. Term life policies usually last only for a defined period of time, such as 10 years; while permanent life is permanent. The perfect life insurance policy depends on many factors like budget, how long the client wants to keep the policy and what purpose the life insurance is being used for. 

2. Price. It is true that term life is cheaper than permanent life in terms of monthly payments. However, it is also noteworthy to mention that the premium of permanent life is fixed and premiums will never increase, while term life increases with every renewal. 

These two types of life insurance both provide peace of mind for the policyholder and the beneficiaries. It should be mentioned that term life policies can usually be converted to permanent life at any time without evidence of insurability (no medical questions), however age does play a factor in the monthly premium when converted.