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Knowledge is power
Just about everyone needs life insurance. But not everyone really understands what it is.
Simply put, life insurance is basic financial protection for your family. Because families are different
and circumstances are different, there are many types of insurance options available.
The role of life insurance is to provide a lump sum of money (the "death benefit") in the event of your death to help:
- Cover your debts, including the mortgage
- Provide an income while the family makes the
transition to continuing without you
- Provide a nest egg for family or a favourite charity
- Make sure children have money for post-secondary education
- Provide money to pay for burial expenses
Your values and needs may not be the same as your neighbours. That’s why there are different types of life insurance for different types of people.
Term Life Insurance – keep costs low
Term Life Insurance provides coverage at a comparatively modest cost. However, term insurance does not build up cash value, and when the term expires there’s no guarantee that you will qualify for a new term policy. If you do qualify, the premium will probably be higher because of your older age.
Whole Life Insurance – build cash value
Whole Life insurance is good value because it helps you build cash value that can be borrowed against if need be. The premium for Whole Life remains the same forever. And whole life insurance is just that: once it’s in force, it can’t be retracted as long as the premiums are paid. Another plus to whole life insurance is that it is eligible for declared dividends, which can be taken in cash or applied to reduce premium or taken in additional insurance and increased cash values.
Universal Life Insurance – stay flexible
Universal Life Insurance provides you with great flexibility. This flexibility allows you to:
- Cfine-tune toward your insurance premium and more
can be allocated under the insurance contract into the investment accounts
- choose from many investment accounts to direct how your money is invested.
What’s more, this flexibility is available not only when you purchase the Universal Life coverage, but all through its life, to accommodate changes in your circumstances or economic conditions. Think of it as life insurance with investment options added.
Q: When should I purchase insurance?
A: For lower rates, the
earlier, the better
Be aware that as you get older the same coverage costs more - regardless of what type of insurance you prefer. The reason? As people age, they tend to have more health problems and are more likely to pass away. This affects the cost of supplying the insurance. So, it’s generally better value to start early.
Another key to understanding life insurance is to have one person you can trust and work with. An independent Unity Life representative
can help you choose the right insurance for your life and help you understand how insurance fits into an overall financial strategy.
Foresters products for Canadians are distributed through Unity Life of Canada, a Foresters Company. Click here
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