Benefits of Term Life Insurance ?
How Term Insurance Works in Canada
Insurance companies determine coverage rates based on your age, gender, and health condition when you buy term life policies. In some cases, a medical exam is necessary. In addition, your driving history, current medications, smoking status, career, hobbies, and family history may all be questioned by the insurance provider and more, this helps them determine their risk.
Your beneficiaries will be paid the face amount of your coverage if you die within the term of the policy. The beneficiary can use the benefit of the term policies to pay for medical and funeral costs, personal debts or mortgage or other needs/wants at that time. Term policies may be extended after the end of the agreed term, but your premiums will be adjusted according to your current age upon renewal. Aside from the death benefit, term life has little value. There are no savings features like there are with a permanent life insurance policy.
Term Insurance is the least expensive type of life insurance as it has the least amount of bells and whistles. Term is great for younger families or people on a fixed income and people who need insurance for a specific amount of time, for example, to cover a 25-year mortgage.
Benefits of Term Life Insurance in Canada
- Lower premiums with a larger payout
The inexpensive price of term insurance is one of its major advantages. Term life insurance policies offer a modest premium that you can afford when compared to other forms of life insurance. Another important advantage of term insurance is that the rates are lower the younger you are.
- Death benefit payment.
Death benefits are tax-free and paid to the beneficiary of the term life insurance policy. The benefits may be used for any reason. In the event that a minor is designated to receive the benefits a trustee must be named to control the money. The designation in the deceased’s Last Will and Testament will direct how the funds should be used and invested.
- Strengthening the policy with extra riders
Riders are optional extras that you can add to your plan to augment the benefits of the plan. By paying a small additional cost, you may attach these riders to your term insurance policy for better security and coverage options.
- Coverage for Serious Illness
Critical illness may strike at any time in your lifetime, and the cost of treatment might wipe out all of your savings. Although term insurance policies’ core advantages are just life insurance, you may add critical illness coverage by purchasing riders. The insurance company will ask health questions to determine the insurance costs. Since benefits are tax-free to the beneficiaries you will have peace of mind knowing that the final expenses will be covered.