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Term Life Insurance

Term Life Insurance in canada

In recent years, term life insurance has become very popular in Canada, and according to a survey, 33% of Canadian parents with children below 18 have term life insurance. You might be thinking why is it so? Well, term life insurance is ideal for anyone with young kids who depend on them financially, and the same can be said if you’re planning to start a new business or need help in paying your mortgage. You can choose between a period of 10-30 years (whichever suits you) and easily pay off your debts without stressing much about monthly expenses. Read on to find out more about how term life insurance works and what are its additional benefits.

Understanding term life insurance:

As it is in the name, term life insurance is the type of policy where you are offered coverage for a limited period of time, based on your choice. This can be anywhere between 10 and 20 to a maximum of 30 years. When you but the policy and you can select the term length as well as the coverage amount and if you pass away before the term completes, not to worry, the policy will still be active and your beneficiaries will receive the benefits.

The interest rates for this policy are also on the lower-end than other insurance products available in the market. However, you should know that the major factors that affect the interest and premium rates are your health condition such as your medical history and how physically fit you are.

How are the rates calculated?

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    The coverage amount:

    In general, the coverage amount is the amount your beneficiaries receive if you pass away before the term ends. Suppose, your coverage amount is $1mn so if you pass away before the end of the term, your beneficiary will receive a lumpsum amount of $1mn completely tax-free, but you should know that the higher the coverage amount the more the premium you pay

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    The coverage length:

    The coverage length option run anywhere between 10-30 years and the higher the period the more you pay in terms of premium. A $250,000 20-year term policy would cost about $24.77 a month while a $250,000 30-year term policy would cost about $41.02 a month.

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    Your physical condition:

    Your age, gender, profession, health condition, smoking status- these also play a crucial role in determining the premium value of your policy premium amount.

If you have any queries, speak with our team at Inslyf, they will be more than happy to help you.

Several benefits of term life insurance:

  • One of the major reasons why Canadians apply for this type of policy is due to the policy’s affordability. It offers a high sum in coverage while low premium rates and that’s the major USP of this type of insurance.

  • The policy is very easy to understand and there is not much jargon in the paperwork. You will be clearly informed of all the details and you can change any clause as you see fit.

  • The insurance comes with multiple death benefit payout options and in the event of your unfortunate demise, the lump sum amount will be paid to your beneficiary to help them with their financial obligations.

  • The policy comes with rider plans and you can add these to enhance the basic tern insurance benefits.

  • The premium you pay for a term insurance plan is tax-deductible and the pay-out also come with tax exemptions as per the existing laws.

  • Pure term insurance plans only offer life cover to the beneficiary in the event of the life insured’s untimely demise. It does not provide any benefit on maturity. However, you can get maturity benefits under a term insurance plan if you opt for the return of premium option. This option will require you to pay higher premiums but will return you the total premiums paid by you if you survive the policy tenure.

Choosing the right plan

There are several options available when it comes to term life insurance policies, however, you should know to be in the market with a one-size-fits-all mentality. Before applying for a policy, carefully read the fine print and see if the terms and conditions meet your financial needs while your premium amount is in your budget. You can always reach out to well-known insurance companies such as Inslyf who will be happy to help you. Get your term life insurance policy and then reap the benefits.