Area of Law: Life Insurance
Answer # 5001
Term insuranceRegion: Ontario Answer # 5001
While there are many variations, there are two main types of life insurance: term insurance and permanent insurance.
Term insurance is the simplest and least expensive kind of life insurance characterized by fixed premiums for a defined period or “term.” The amount of the policy is paid out to the beneficiary if you die during that period; if you survive the term, the policy expires. Term insurance is often sold in 1 year, 5 year, 10 year, or 20 year terms, and is often available in renewable and convertible forms. A renewable term insurance policy allows you to renew the insurance policy at the end of the term, at an increased cost, but without having to take a medical and prove your insurability. A convertible term insurance policy allows you to convert your policy into a cash-value type of policy without having to prove insurability.
It is best to buy term insurance that is both renewable and convertible, unless you are sure that your needs for insurance are temporary.
You now haveoptions: