Life Insurance


Updated: Sep 10, 2020
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Life insurance is the third most popular type of insurance, right behind homeowners and auto insurance. It's a legal agreement between two parties - the policyholder and the insurance company.

It's one of the most important types of insurance you can get, and one of the best financial investments you can make. There are many benefits to life insurance, and we'll be exploring them below. In this section, we'll get into everything there is to know about life insurance.

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Editor's suggestion: Life Insurance - Nov 28, 2020

What Is Life Insurance?

Life insurance is a legally binding contract between you and your insurance company, where the insurance company guarantees a predetermined payment in your death. That is called a death benefit, and the amount is going to depend on your insurance premium.

The premiums are more often than not paid monthly and are usually smaller in amount than other types of insurance. When you’re getting life insurance, you’ll have to thoroughly disclose your current health, activities, and medical history.

You can get rejected for life insurance if you’re considered a high-risk applicant. Just because one issuer has rejected, you don’t mean that every issuer will. In short, the lower the risk, the lower the monthly premium you’ll have to pay.

The life insurance term can be voided if the customer fails to pay premiums, surrenders the policy, or breaches the contract. Life insurance is one of the most important types of insurance for numerous reasons.

One of the main reasons why life insurance is so popular is financial wellness. In the case of a tragedy, life insurance will secure your beneficiaries. This type of insurance is essential for families – people looking to leave an inheritance or business.

PRO Tip
Everyone can benefit from purchasing life insurance. The number of options is vast, and depending on you and your insurance company, your policies will vary wildly. A life policy is a proactive investment into the future of your loved ones, your businesses, or other beneficiaries.

The Types Of Life Insurance

There are more than a couple of types of life insurance. Different types are going to cover different signs to a different extent – and their premiums will vary wildly. Depending on your unique needs of financial capabilities, you’ll want to pick a different policy.

Term Life

A term life insurance policy lasts several years and then pays out after it ends. That can be 10, 20, 30, or in some cases, 40 years. The longer a life insurance policy, the bigger the eventual payout.

Increasing Term and Level Term

An increasing term life insurance policy is a policy where the premium increases every year. A Level term policy is a policy where your premium will remain the same throughout your insurance.

Permanent & Whole Life

Permanent life insurance is what most people think of when they imagine life insurance policies. It’s a policy you pay until your eventual departure, or until you void the contract.

Whole life insurance is a permanent insurance type that amasses cash value over time.

Single-Premium

Single premium life insurance is a type where you make a one-time payment instead of monthly or yearly payments.

Life, Guaranteed, Indexed, and Variable Universal Insurance

A universal life policy is a permanent insurance option where cash value earns interest over time.

Guaranteed universal life insurance doesn’t build up cash value.

Indexed universal insurance allows the policyholder to earn a preset or equity-indexed sum of the cash value return.

Variable life insurance is a policy where the policyholder can invest the cash value into aspiring prospects.

Burial Insurance

Burial insurance is a low-cost insurance option that gives out a symbolic death benefit. It’s usually taken by less financially advantaged families to help with burial costs.

Besides these standard types, your insurance company might offer additional packages, perks, and features.

PRO Tip
Never get a financially burdening insurance policy. Always get a policy that complements your lifestyle and fits your budget.

Pros and Cons of Life Insurance

Pros

  • Multiple options and packages
  • Could bring financial security
  • It’s a proactive investment
  • User orientated benefits
  • It might pay dividends

Cons

  • Continual rates and payments
  • Possibility of rejection

Final Thoughts

Life insurance is one of the most important investments you can make in yourself. It’s a proactive step to protecting your beneficiaries’ financial security and could relieve your family of unnecessary financial stress upon your departure. There are different types of insurance for your needs, and they don’t all include death benefits.

Canadian Life Insurance Recap


Life Insurance FAQs. What People Ask About Life Insurance Offers

Can I Get Rejected for Life Insurance?2020-09-10T00:32:25-07:00

Yes. Some insurance companies may declare you high risk due to your activities, current health, or medical history. If you’re considered high risk, you can get rejected for life insurance. Just because you’re rejected by one company doesn’t automatically mean you’ll get rejected by another.

How Much Life Insurance Do I Need?2020-09-10T00:31:58-07:00

That solely depends on your needs, wants, budget, and the insurance company. Never get a policy you’re not comfortable with. It’s always better to get a cheaper policy and continually pay it to get a policy that you’ll stop paying eventually.

What If I Stop Paying My Monthly Premiums?2020-09-10T00:30:50-07:00

When you stop typing your monthly premium, you’re going to void your life insurance policy unless you have a single premium life insurance policy.

Is Life Insurance Worth It?2020-09-10T00:31:29-07:00

Yes. Life insurance is always worth it and could help you save your family, loved ones, or beneficiaries from financial stress after your departure – or leave them an inheritance. Life insurance is also a fantastic investment into your own future, as particular types of life insurance don’t give out a death benefit, but rather work as a savings account of sorts.

What Is the Cheapest Life Insurance Policy?2020-09-10T00:30:18-07:00

The cheapest life insurance policy is Burial Insurance. It’s usually a low-cost insurance policy that allows people to bury their loved ones without suffering from financial stress.

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