Top 6 Reasons to Get Term Life Insurance

Let’s be frank: life is unpredictable. Although no one wants to think about death, having the right life insurance policy is essential to protect your family in the event of the unthinkable. Fortunately, buying life insurance doesn’t necessarily mean paying exorbitant premiums for lifetime coverage.

Term life insurance is an affordable solution to the life insurance needs of many people. Learn about term life insurance, how it works, how much it costs, and if it’s the best option for you and your family.

What is term life insurance?

Term life insurance provides temporary financial protection for five to thirty years at a low, fixed cost. The majority of insured choose term life insurance to meet short-term financial needs such as debt repayment, income replacement, child care expenses and funding your child’s education.

Term life insurance, unlike other types of life insurance, does not have a savings or investment component. Companies can offer substantial death benefits at lower rates if these elements are not present. This option is particularly attractive to adults with significant, short-term financial needs, as they can afford much larger life insurance at a reasonable cost.

The benefits of term life insurance

Term life insurance is a great choice for many individuals and families. Examine the benefits of term life insurance to determine if it is the best life insurance plan for you.

1. She’s easy to understand

Some people hesitate to take out life insurance because the process seems complicated to them. However, term life insurance is simple to understand because it simply pays a death benefit if you die during the term of the policy, as long as the premiums are paid. On the other hand, permanent life insurance incorporates interest, market fluctuations and savings into the life insurance product.

2. It is inexpensive

Most Canadians overestimate the cost of term life insurance, believing it to be more than three times the actual cost. Term life insurance is the best option for most people because it provides comprehensive coverage at a low cost.

3. It offers more extensive coverage

You may be surprised to learn that the final amount for your life insurance needs is $1 million or more. This large sum can cause people to panic, worrying that they won’t be able to afford the coverage they need.

Term life insurance lets you buy life insurance worth up to millions of dollars, giving you the coverage you need in one policy at a low cost.

4. The non-taxable death benefit

If you die during the term of your policy, the life insurance company will pay a lump sum to your beneficiary(ies). Fortunately, the proceeds from the temporary death benefit are tax-free, so your beneficiary can keep the full amount.

5. Term life insurance allows for flexible payment and policy options

Term insurance offers a variety of policy payment options. Premiums can be paid monthly, quarterly, semi-annually or annually. Most life insurers charge a processing fee if you don’t pay once a year, so paying annually can save you money.

You can also specify whether you want coverage for one year or thirty years. The most common terms are in five-year increments, with coverage ranging from five to thirty years.

6. You do not risk any penalty in the event of termination

You can cancel your term policy while it is still in effect without incurring any costs or penalties.

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