Sooner you buy better it is and good health is a key to low rates. If you are diagnosed with a health condition your premium may either be rated or you may be declined the life insurance or the decision may be postponed till you are fully recovered and your health becomes stable.

When you are young, life insurance is relatively cheap. But as you age, the premium may become unaffordable. Secondly, you may become uninsurable due to your health or be a rated risk and have to pay a lot more for coverage. Many people who wait too long to buy the life insurance may have to settle for a smaller amount of coverage because they can’t afford the premium for the life insurance they are looking for now.

There are two types of life insurance plans. One is a Term Life insurance and the other one is a Permanent Life Insurance.

Term life insurance is the least expensive type of life insurance. The term plan is usually for 10 years, 20 years or you can choose any term up to 40 years (depending up on the age of the insured). The cost for different term insurance plans varies based on the number of years you want to lock in the benefit. The term plans are renewable and convertible. You can renew your existing term plan for another term or you can convert it into a permanent plan (subject to some conditions).

Term insurance rates in Canada have come down in last couple of years and it is very cost effective to get a large amount of coverage with premiums locked in for 10 years, 20 years or for any term up to 40 years (depending up on the age of the insured). If you have an old term insurance policy it might be good to look at your options to renew that plan. Even though you are older the premium for a new plan could be the same or less because of term life insurance cost reductions.

Always look at the length of time you will be at financial risk. How long will it take to pay off your mortgage or debts, raise your children, save for retirement, etc. These are the high risk years and when you are buying term life insurance to protect against these risks, buy the term you need and save money.

Permanent life insurance plans provide protection for the whole life of the insured person. There are various options to pay premium for these plans. You can choose to pay for life or you can choose to pay in 10, 15 or 20 years, etc. Once payments are completed, the benefit it will pay out is locked in for the rest of your life.

There is guaranteed Cash Value in the paid-up plans. It is a very important tool for retirement planning too. You can either withdraw the cash value and surrender the policy or borrow from the cash value and keep the insurance coverage too. Many people call it as LIFE INSURANCE WITH MONEY BACK OPTION. Certain portion of the cash value can be borrowed by you while you are still alive to supplement your retirement income or to take care of your other financial needs like to pay off your mortgage, other debts or to plan a vacation for yourself. Your beneficiary will get the death benefit tax free which is reduced by the amount you borrowed and the interest on it. You use your money while you are alive to maintain your life style and your beneficiaries will get the balance money after your death to take care of your final expenses and rest in legacy.

Permanent life insurance plans are either Whole Life Insurance Plan or Universal Life Insurance Plan.

Whole Life Insurance Planis a fully guaranteed life insurance plan. Once payments are completed, the benefit it will pay is locked in for the rest of your life. No more premiums are required to keep the life insurance in force and this is a guarantee in writing.

There are participating whole life insurance plans too which pay dividend to the policy holdersfrom time to time which can be utilized either to pay the premium or to buy additional coverage with that amount or you can have it in cash from the insurance company.

Universal Life Insurance Plan is different from the whole life insurance plan. A universal life insurance plan is a permanent life insurance plan that allows you to investment additional money into an investment portfolio inside the plan. The interest and growth earned on your money inside the universal life insurance policy will grow in the tax sheltered account (policy fund) as long as the money remains inside the policy. You can choose from guaranteed investment options (GICs), bond funds, equities and other managed portfolios. You have the option to change these investments over the period of time. You can either make a withdrawal or you can borrow money from the policy. You are not required to make payments on this loan, as the ultimate death benefit will pay off the loan and all interest accrued. At death, the entire amount of investment that has accumulated and grown tax sheltered will be given tax free to your beneficiaries along with the amount of insurance.

We would be happy to help you look at your short term and long term needs and give you very affordable options for your life insurance.