Insurance

Term Insurance
The word term refers to temporary – insurance to cover temporary needs determined by a specific time line. For example; it can be used to cover a mortgage, a loan, children’s education or a spouse’s income during the active family years. The advantage is that it is less expensive, on a short term basis, than permanent insurance as this type of contract is usually purchased for a period of 1, 5, 10 or 20 years.

Term insurance can be purchased with two important aspects, the right to renew after the period is up and the right to convert at any time. Conversion privileges allow you to purchase a permanent insurance of the same amount without medical evidence.

Term to 100 Insurance
This type of insurance covers you for your lifetime. When compared to the other 1, 5, 10 and 20 year term insurance, the Term to 100 policy is more expensive in the early years but significantly less on a long term basis. Instead of increasing premiums every renewal, this one remains level and can be guaranteed.

Permanent Insurance
Permanent insurance (or whole life) guarantees, whenever the time of death, that the insurer will pay out the capital insured to the named beneficiary, if, of course, premiums payments have been maintained and the policy is still in force. Most of the time, the premium is level; meaning that it will remain the same as long as it is kept in force, even if the risk increases with age. During the first years, the premium is higher than the risk you represent and is used to establish a reserve for the future years when the risk increases with age. This reserve is also called ‘cash value’ which you may be able to borrow against subject to interest charges, it can be redeemed if the policy is cancelled or can be used to temporarily pay the premiums due.

Many options are available to you and your broker will be able to assist you in your choice.

Universal Life Insurance
In the early 1980s, insurance companies came up with a new type of insurance that highly interested not only those people in search of insurance protection but also those with money to invest.

The main advantage with this product is that you can invest – tax sheltered - surplus sums of money, in addition to the premium payable. You also have the possibility of paying the insurance costs with monies accumulated in the tax sheltered account. Another advantage that is highly appreciated is the fact that the accumulated sums are paid out, at death, to the beneficiary tax free.

This type of insurance can represent a very interesting investing option. Take note however that the length of the investment is quite important. In fact, the longer the investment period - the better the appeal of this product.

Critical Illness
One in four Canadians will suffer a Critical Illness before age 65, this can be heart disease, a life-threatening cancer, stroke, MS, Alzheimer’s disease or other illnesses. Critical Illness insurance is designed to protect your way of life by providing a substantial lump sum of money up-front, to be used at your discretion.

Disability Insurance
This type of coverage is designed to replace your income in the event of disability due to illness or accident. The amount of coverage is determined according to your income. There are multiple options with respect to benefits, waiting period etc. Discussions with your broker are essential to determine the best plan and options to suit your needs.

Long Term Care
This type of insurance covers you for long term care if you suffer from a chronic disease such as cancer, arthritis and Alzheimer’s, etc. It may cover the costs associated with a long term care facility, home care and leasing of medical equipment.