Term Life Insurance

• Policies typically cover a specific period, such as 10, 20, or 30 years, However other term lengths do exist.
• Some insurers offer customizable term lengths (e.g., 15 or 25 years).

• Premiums are usually lower than permanent life insurance since coverage is temporary.
• Fixed premiums for the duration of the term.

• If the policyholder passes away during the term, a lump sum payout is given to the beneficiaries.
• This payout is tax-free in Canada.

• Many term policies offer guaranteed renewal, allowing policyholders to extend coverage without a medical exam.
• Premiums increase upon renewal, based on age and new term length.

• Some policies allow conversion to permanent life insurance (e.g., whole life or universal life) without requiring a medical exam.

• Coverage typically ranges from $50,000 to several million dollars, depending on the insurer and policyholder’s needs.

• Critical Illness Rider: Provides a lump sum if diagnosed with a covered illness.
• Accidental Death Benefit: Increases payout if death is due to an accident.
• Disability Waiver of Premium: Waives premiums if the policyholder becomes disabled.

• Level Term Insurance: Coverage amount remains constant throughout the term.
• Decreasing Term Insurance: The payout amount reduces over time (often used for mortgage protection).

Covers two people under one policy (typically spouses or partners).Two common types:

• First-to-Die: Pays out when the first policyholder passes away.
• Second-to-Die (Joint Last-to-Die): Pays out when both individuals pass away (often used for estate planning).

• Fully Underwritten Policies: Require a medical exam and provide the lowest rates.
• Simplified Issue: No medical exam, only a health questionnaire.
• Guaranteed Issue: No medical questions or exam but higher premiums and lower coverage limits.

• Some people buy multiple term policies with different durations to match financial obligations (e.g., one policy for a mortgage, another for children’s education).

• Many people use term life insurance to cover mortgages, loans, or other debts, ensuring financial security for dependents.
• Often a better option than lender-provided mortgage insurance, as beneficiaries control the payout.