Starting to seriously consider purchasing life insurance can’t be psychologically uncomfortable: indeed, no one enjoys thinking about their own mortality, which life insurance definitely brings to mind. That being said, if you have people who count on you — and your financial resources — to support them, you really ought to make sure that you are not leaving them with a heavy burden should you die prematurely (which is a very costly process in and of itself.). One of the best ways to achieve that result is to get life insurance sooner rather than later. If you decide to do that and to start the process with the best of intentions, you can still get overwhelmed while weighing all the options available, some of which are complex. Emma and other service providers in Quebec can help you make some sense of all that. For now, you should read the following article to learn more about some of the most common types of life insurance.
Temporary Life Insurance
Let’s start with assurance vie temporaire, which is probably the most popular type of life insurance. With the products that fall into this category, you have to pay premiums for a predetermined period of time (5, 10, 15 or more years) in order to get coverage that will protect your beneficiaries. Said coverage will be used to protect your family in the event of the loss of your income, or for a specific need that you already know will come. For example, you could go for a 25-year term that will help pay for your children’s education. You could also get life insurance to guarantee the repayment of your mortgage loan should you be unable to earn money for an extended period of time. If you neglect taking these kinds of steps when everything is going well in your life and that you die before your mortgage is paid off, your family may get crushed under this financial weight
Permanent Life Insurance
Most people that don’t know anything about life insurance and think about it for the first term probably envision permanent life insurance as the main and / or only type of life insurance available. Permanent — or whole life insurance — will have you pay fixed premiums during your entire lifetime. Unfortunately, said premiums are considerably more expensive than comparable term life policies with long duration (25 years or more). Unlike term life insurance, though, these policies guarantee a payout to your beneficiaries when you die. Furthermore, you usually can tap into the “pot” made of the sum of your premiums and the returns they generated net of management fees.
Now that we’ve covered the 2 main types of life insurance, let’s dive into niche / more specific insurance products.
Universal and Variable Life Insurances
Universal and variable life insurances are permanent life insurance products with a twist. Universal life insurance also lasts for your entire life and provides your family with a guaranteed payout upon your death. It also allows you to access your money should you need it at any time. The twist is that you can adjust your premiums — and thus the payout of your insurance — should your life circumstances change dramatically.
Variable life insurance is a type of universal life insurance that gives you additional control by allowing you to choose what types of investments your money will be put in.
Creditor Life Insurance
Creditor life insurance is a subcategory of temporary life insurance used by people who want to protect a relative (usually a spouse) with which they co-signed a large loan, like a mortgage. It’s typically offered by banks to new homeowners and lasts for the term of the loan. That being said, you should be aware that upon your death, your financial institution will receive the payout directly, without your surviving partner seeing a penny!
Your life recently changed (wedding, first child, new job, etc.) and you want to make sure that you and your family are prepared for any eventuality? Now is as good a time as any to get life insurance : after all, you shouldn’t wait for troubles before thinking about protecting your assets and people who depend on you.
