Term Life Insurance
Term life insurance is a lower-cost product that protects you for a set period of time, like 10 or 20 years. Your premium is guaranteed to stay the same for the entire term period chosen. It also has a lower initial cost than permanent life insurance, and it’s a popular way for those just starting out to protect themselves and their families.
Mortgage Life Insurance
Mortgage life insurance is a special type of term insurance, sold by mortgage providers or financial institutions when a mortgage is taken out. Its purpose is to protect the lender and make sure the mortgage is paid up if you were to pass while you still owed money. The main difference between Mortgage insurance and Life insurance is that Mortgage insurance is generally a decreasing benefit, so as your mortgage reduces so does the benefit and if something happens to you the money goes directly to the lender and your balance debt is paid off. In Life Insurance, your face value amount is not dependent on your loans, it remains the same and money goes to your beneficiary and not any lenders. The beneficiary decides to pay the balance and keeps the remainder. Most Life Insurance policies will require a medical test and will be underwritten at the beginning to avoid any questions at time of claim. Therefore, it’s generally a better idea to cover your mortgage debt on a normal term life insurance plan, either with stand-alone coverage or as part of your primary life insurance policy.
Permanent Life Insurance
Permanent life insurance, as the name states, lasts your entire lifetime. As long as you pay your premiums, you’ll never “age out” like you do with term insurance. As permanent policies are guaranteed to pay out, they’re much more expensive than term policies with similar coverage. Some permanent policies have cash component and offer other benefits, including tax-advantaged investment.
Joint Life Insurance
Many term and permanent life insurance can be purchased as single or joint policies. A joint policy insures two people (generally spouses or common-law partners) as a single “life insured.” Joint premiums are higher than single coverage, which makes up for the increased risk that the benefit will be paid out. Joint policies are either joint first-to-die or last-to-die. Joint first-to-die pays the death benefit first to the surviving partner after either of them die, while last-to-die pays the benefit to the elected beneficiary after both people on the policy die.
For a custom-tailored insurance plan, please talk to one of our licensed advisors who will sit down with you to understand your unique requirements.