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What is Term Life Insurance?
Term life insurance, as its name suggests, is only good for a specific period of time. You can get term life insurance for any finite amount of time, generally referred to as a term. If the insured party dies during the term, their beneficiaries will receive a payout. If they die once the term has expired, their beneficiaries are not guaranteed a payout.
Insurance companies generally offer fixed rates on their term life insurance schemes. This means that you will generally have to, particularly in annual renewable terms, pay a constant amount of money at fixed intervals. Term insurance quotes are fixed, and you will generally be required to just pay a fixed amount every month, quarter or year depending on your plan.
Another key feature of term life insurance is that the beneficiaries of the insured deceased are guaranteed a fixed sum of money if they passed away during the term period. It is irrelevant how long a policy has been around. Even if coverage has been around for a single day before the insured party died, his beneficiaries will receive the same payout as if the coverage had been around for twenty years.
Thus, unlike other insurance policies, this form of insurance does not have a cash value component since the premium is used to keep the policy active. At the end of the term, you are not required to pay any premium but you are also not entitled to any payouts.
Term Life Insurance Quotes & Rates
Term Life insurance is a policy designed to provide a high level of Insurance protection for a short period of time. This policy provides the client a flexible Insurance option accommodated by very low costs. To give you an example, a newly married couple has a 2 year old boy. The family also has a $200,000 mortgage on their new home. The couple wants to financially secure their future in the case of either partner passing away. They do this by purchasing a Term Life Insurance with a $200,000 death benefit for 15 year term for as low as $20/month in the case of a death, the house would get paid off by the Insurance coverage therefore securing the family left behind from financial crisis. Why wait, get a free Term Life Insurance quote now.
Term Life insurance is also an appropriate product for meeting immediate needs of clients. What makes this product even more appealing to our clients is the option it provides to convert to a Whole Life policy or Universal Life policy at any time.
You pick your Term
Term Life Insurance plans can vary from 5 years to 100 years, you decide your term period. On average, people opt for a 20 year Term Life insurance policy as their choice of insurance. At the end of a Term, a renewable option may be available without proof of health. Our Term Life Insurance quotes provide you an opportunity to continue existing Life insurance with conversion options upon expiry.
This type of Insurance is looked upon as an Initial step towards permanent Insurance(Whole Life Insurance and Universal Life Insurance).
Picking the right kind of insurance scheme to opt for is easy, but this all-important decision can be aided with a clear understanding of the different types of insurance out there. Life insurance can be broken down into two broad categories permanent life insurance and term life insurance.
What are the advantages of this insurance?
Term insurance quotes are generally lower than their permanent insurance quote counterparts, and so they are generally the preferred means of insurance. Unlike in the case of certain permanent insurance plans, a payout in term life insurance is not guaranteed and so it is significantly cheaper to obtain.
As a result of lower term insurance quotes, it is no surprise that term life insurance is notably more popular than its alternatives in the insurance market. Most people just identify particular periods of their life where they feel their beneficiaries would require assistance in case of their death, and seek coverage for that particular period.
What are the drawbacks?
Many people avoid term life insurance because they view it as a sunk cost. If the insured person does not pass away during the term period, their beneficiaries will not enjoy a payout at all. However, it is a great way to make sure that one’s dependents will remain protected in case of an unforeseen death. Since term insurance quotes are significantly cheaper than their permanent insurance counterparts, they are an affordable way to make sure that one’s children, spouse, parents and other loved ones are not left in the dark financially by your death.
Who is term life insurance policy good for?
Due to its nature, term life insurance is generally used for a pure income replacement needs that an individual may have. These needs may include dependent care, consumer debts, education for dependents, mortgages and funeral costs. Once these needs are extinguished, people either opt to remain uninsured or go for a permanent life insurance.
Most people who opt for term life insurance are on a budget and cannot afford a high premium. If you are young and in good health, and you don’t want to get yourself into any unnecessarily complicated plans but still want to keep your beneficiaries protected, getting a term life insurance might be your best bet.
What are the different kinds of Insurance?
There are a number of different kinds of term life insurance schemes out there to choose from. The main difference between these options is the length of the term, and whether they are renewable or not.
One version is an insurance scheme with an annual renewable term. In this case, the person seeking insurance will be covered for a period of one year. If they die during this year, their beneficiaries will receive a payout from the insurance company. However, they are entitled to continued renewable coverage for a fixed number of years. In the case of annual renewable term, the rates for the insurance policy may be revised on an annual basis with each renewal.
Level term life insurance is a more popular alternative to annual renewable term insurance. These are for longer specified terms, most commonly 5, 10, 15, 20, 25 and 30 years in duration. Subscribers are guaranteed a fixed premium throughout the term of the insurance scheme.
Decreasing term life insurance is another variant that many people opt for. In such a scheme, the death benefit offered decreases each year the policy is in place, and the policy ceases to exist once the death benefit becomes zero. The advantage of this policy is that you’re able to stretch out your insurance policy for a longer period of time at similar rates to level term life insurance.
How are term insurance quotes determined?
Term insurance quotes are determined pretty much the same way permanent insurance quotes are determined. If you are looking to get a term life insurance, you will need to get a medical exam that is routinely carried out by insurance companies themselves. They may also look at your medical records to reach a conclusion as to your health.
Individuals with good health can get term life insurance within a few seconds and without much hassle at a great rate. Those with health complications including terminal illnesses may not be able to get insurance very easily, and if they do manage to find it, it will probably be at a good rate.