You’ve finally done it. You’ve made the decision to get life insurance. You’re ready. And then you look at your choices. What’s a term? How many years should you get? What should you be paying? Don’t worry, we’re here to make purchasing the right life insurance policy a whole lot less intimidating.
Let’s Talk Terms.
When you start shopping for life insurance in Canada you’ll most likely come across 10 year, 20 year, 30 year and 100 year terms. Each one of these is designed for people in different stages of life and really can’t be compared to one another.
10 Year Term:
Ideal for people that need short term life insurance. Maybe you need a loan, a line of credit or a business loan.
Something to consider: While the premiums might be lower, remember that your health could change in 10 years and that will affect your ability to renew.
20 Year Term:
Ideal if you’re between the ages of 40-60 and looking to take care of your loved ones or pay off debts in the event of death.
30 Year Term:
Ideal if you’re between 18-30 and looking for life insurance that will cover you into your 60’s.
100 Year Term:
This is considered a permanent insurance policy so it does carry higher premiums than term insurance, but doesn’t have the renewal rates.
Think About the Future.
Are you still planning to have children?
- Consider who will be financially dependent on you for more than the next 20 years.
What debts will you have for the next 10 years? 20 years?
- If something should happen to you, how much debt will you leave behind?
How long until your mortgage is paid off?
- Amortization periods on mortgages are usually 25 or 30 years.
Do you want to renew your policy every 10 years?
- With a 10 year term you must have your policy underwritten every 10 years. If your health changes over this time, it could affect your insurability.
Many people compare a life insurance quote for a 10 year plan with 20 year or 30 year plan and go with a 10 year term because it appears cheaper. Unfortunately, they end up paying more in the long run. If you take out a 10 year term policy and renew it for an additional 10 years, the total cost to provide 20 years of coverage will be more than a 20 year term policy was in the first place.
At the end of the day, you want to make sure you purchase the life insurance policy that is right for your budget, your age and your stage in life. That’s why we’re here from 8am to 6pm MST, 7 days a week. Give us a call, chat with us online or get a simple and easy quote right now.