Life Insurance Articles

Types of Life Insurance

Types of Life insurance may be divided into two basic classes:

• temporary or term insurance
• permanent or whole life insurance
  

Term life insurance or 'term assurance' is the first type and provides for life insurance coverage for a specified term of years for a specified premium. The policy does not accumulate cash value. Term is generally considered "pure" insurance, where the premium buys protection in the event of death and nothing else.

The three key factors to be considered in term insurance are:

• face amount (protection or death benefit)
• premium to be paid (cost to the insured)
• length of coverage (term).

Assure-All Associates shops all the top insurance companies to get you the absolute best rate for your situation.

To see your rates for term insurance simply follow the link to the right and fill in the quick form.

Whole Life insurance or permanent life insurance is the second type of life insurance that remains in force (in-line) until the policy matures (pays out), unless the owner fails to pay the premium when due (the policy expires or policies lapse). The policy cannot be canceled by the insurer for any reason except fraud in the application, and that cancellation must occur within a period of time defined by law (usually two years).

Permanent insurance builds a cash value that reduces the amount at risk to the insurance company and thus the insurance expense over time. This means that a policy with a million dollars face value can be relatively inexpensive to a 70 year old because the actual amount of insurance purchased is much less than one million dollars. The owner can access the money in the cash value by withdrawing money, borrowing the cash value, or surrendering the policy and receiving the surrender value.

Assure-All provides expert free advice to assist Canadians with the decision of choosing either term insurance or whole life insurance for their particular needs.