It is important to understand what is life insurance in order to correctly analyze different life insurance products and life insurance premiums charged by life insurance companies.
Life insurance provides a death benefit to the life insurance beneficiary when you pass away. Some types of life insurance policies have cash value while others don’t. Cash value is an amount an insurance company will be liable to pay you if you do ever decide to cancel your life insurance policy.
The Different Types Of Life Insurance Policies Available In Nova Scotia, Canada
A majority of people believe that there are just two types of life insurance policies available for people in Canada; a term life insurance policy and permanent life policies. However, there are five basic types of life insurance policies and life insurance costs that can vary based on each type of policy.
Life insurance products have different options and coverage plans that are tailored to cater to the insurance needs of Canadians. Let’s look at some of the pros and cons of the insurance policies that are available to Canadians for life insurance coverage.
1. Term Life Insurance
A term life insurance policy provides life insurance coverage for a select period of time which is referred to as the term of the policy. The life insurance beneficiary will receive a death benefit as a tax-free payment if the policyholder dies while the term life policy is still active.
A term life insurance policy is made available for many different terms such as 10, 20, 25, or 30 years. Some life insurance companies in Canada allow you to select the period of time you want for the validity of a term life insurance policy.
Life insurance companies let you select the insurance coverage term and the total death benefit for the life insurance beneficiary. This is required to calculate the cost of life insurance and monthly premium payments the beneficially will be obliged to pay to keep the policy active.
The monthly premium payments stay the same in a term life insurance policy. At the end of the life insurance coverage term, policyholders have the option to convert it into a permanent life insurance policy before reaching a certain age. A term life insurance policy is an affordable and simple way to protect your family in case of an untimely demise.
2. Permanent Life Insurance
Permanent life insurance (aka whole life insurance) is valid for your entire life and is associated with a cash value. The cash value increases as you make the premium payments of a permanent life insurance policy. You can cash out the insurance coverage based on the total insurance premiums you have deposited for the permanent life insurance policy. This can be helpful especially during retirement.
The premiums for a permanent life insurance policy are higher because you are covered for your entire life. Some permanent life policies allow the policyholder to take out a loan based on the total insurance premiums deposited.
The monthly premium payments of a permanent life insurance policy stay the same throughout its coverage. The total death benefit can grow based on the total premium payments that have been made against the life insurance policy.
3. Limited Pay Permanent Life Insurance
A limited pay permanent life insurance policy resembles a permanent life insurance policy but for a shorter period of time; often 20 years or less. After you make all of the monthly premium payments for the total life insurance coverage you are entitled to receive a guaranteed payout. No more monthly premiums have to be paid to receive the guaranteed payout.
These are the most expensive types of life insurance policies because the premium payments are often ‘front loaded’. This means that all expense charges, fees, commissions, and interest costs are subtracted right away from the premiums paid.
4. Universal Life Insurance
Universal life insurance is similar to permanent life insurance but it also has a long-term investment factor attributed to the policy. The life insurance company provides the policyholder the option to invest the total monthly premium payments into various investment plans for future returns.
Universal life insurance is the most versatile option for individuals looking for life insurance products with investment benefits other than the death benefit for the life insurance beneficiary. Universal life insurance products require the policyholder to be aware of the investment goals that will be used in coordination with the life insurance policy.
5. Term-To-100 Life Insurance
Term-to-100 life insurance is permanent life insurance coverage without a cash-out option for the policyholder. This makes the term-to-100 life insurance policy one of the most affordable options for permanent life insurance coverage.
You can think of this life insurance policy as a combination of a term life policy and a permanent life insurance policy. If you live to see a hundred years you no longer need to pay premiums but you will still have the life insurance coverage.
Finding The Right Life Insurance Broker in Halifax, NS
A life insurance company can help you choose the right life insurance policy based on your personal needs. Some life insurance companies might require you to take a medical exam before you can apply.
Some basic factors that affect the cost of life insurance are your age, health, smoking status, gender, profession, and hobbies. Hence, it pays to shop around. Finding the right plan at the best rate can be extremely beneficial for securing your and your family’s financial future.
What Are Typical Life Insurance Premiums In Nova Scotia?
If you reside in Nova Scotia and are looking for a typical life insurance policy these are a few examples of the average premiums you can expect to pay for each policy type.
- A 45 year old non smoker male Term policy for 10 years at 500,000 face value on average cost around $50 a month
- A 45 year old non smoker male whole life policy payable until the insured passes away 50,000 face value on average cost around $120 a month
- A 45 year old non smoker male universal life policy payable until the insured passes away 100,000 face value on average cost around $115 a month
For the best typical life insurance offers out there, you can Trust the team at McIver Insurance to help you pick the right plan for your goals. With years of experience and a 5-star reputation, they are the best resource for those seeking insurance coverage in Nova Scotia.