Life Insurance Coverage
There are many types of life insurance available to an individual; one chooses the type of life insurance depending on what one wants to insure.
Most insurance companies allow for a consultation first before one applies to get insurance. Since the quality and quantity of coverage are measured in with several, factors put into consideration.
For example, the number of premiums that one pays monthly can easily determine the type of coverage that one is suitable for. In this, a lot of concentration is taken on the different types of insurance and the type of coverage it puts on the table.
As we, all understand life insurance is subdivided into two: Whole life insurance and term insurance. Most individuals are opt-in to acquire the term insurance because it is affordable, unlike whole life insurance.
However, as they say, cheap is expensive, and term insurance does not have as many benefits like that of whole life insurance. Other than that, it does not matter on the type of life insurance that one applies for as all of them are meant to enhance the security of an individual either financially or socially.
The life insurance in Ontario under the Financial Services Commission has a mandate that an individual has to go through medical examinations before the issue of life insurance. This is mostly seen when one is opting for an individual type of life insurance.
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Permanent Life Insurance
This type of life insurance provides coverage of one’s whole life. Permanent life insurance does not have an expiration date and has some tax benefits to it. For example in life insurance, Ontario suggests a beneficiary of permanent life insurance will receive tax benefits as long as the individual is not in the deceased estates.
The cash value component also comes with Permanent life insurance. Some of the examples of permanent life insurance are whole life, universal life insurance, and variable life.
I. Whole Life
This is a very old form of traditional insurance before the shift of permanent life insurance. The life insurance Ontario, suggests that whole life insurance id the popular type of insurance in Canada. It has a guaranteed growth in cash value as long as one pays premiums faithful.
The premiums of life insurance are fixed. Other than some of the benefits that one has with life insurance, it has a wide coverage that one enjoys.
One of the most enjoyed coverage is that this policy is hereditary, meaning that your children and your spouse can be held as beneficiaries of the whole life insurance. Other than that, whole life insurance has the coverage of a lifetime, which is enjoyed by beneficiaries.
II. Universal Life Insurance
Unlike whole life insurance, universal life insurance has the flexibility of premium payment and death benefits. Premiums can be skipped to be paid on a later date as long as one maintains the minimum or maximum value of premium yearly. Cash value is also enjoyed in universal life insurance just like other types of permanent life insurance.
In Canada, universal life insurance, unlike any other permanent insurance, is transparent about the mortality cost. That is the reason why life insurance Ontario, obliges insurance companies in Ontario to offer universal life insurance to encourage the holders to keep their cost of mortality the same so that it does not increase, as one gets older. Universal life insurance also benefits. Its transparency is not only on the line of mortality cost so it is their administrative costs.
III. Variable Life Insurance
Investment can be a good idea especially in the world order we live in. Variable life insurance, allows one to put their cash value in an investment account. The invested money can be put in either be put in one premium or death benefit.
However, the Insurance Bureau of Canada, Ontario oversaw by Life Insurance Ontario does not permit the insurance companies to issue invested funds to either death benefits or premiums especially if the investment amount is on the low.
In conclusion, some of the benefits one gets from obtaining variable insurance is that: the owner has control of his/her cash, the owner is not taxed if there is no growth in cash and profits of life insurance are neither taxed.
Term Life Insurance
Term insurance is distinguishable to permanent life insurance as it has an expiration date in that it works on the thought of renewal or cancellation of the policy. If the policy is not renewed then the policy is script off. It involves an easy procedure to acquire it.
In terms of premium payment, it is flexible since when you are young you tend to pay less as compared to when one is old. In Canada Ontario, depending on the type of insurance company, there are different types of terms that one is introduced to i.e. Term 10, Term 20, Term 30, Term 65, Term 70 and Term up to 100. The figures represent the limit of the number of years the term life insurance covers.
Many individuals in Canada opt for term insurance, as it is much cheaper as compared to Permanent life insurance. Unlike some of the other types of insurance apart from whole life insurance, the premiums to be paid are predominantly not flexible rather than they are fixed.
Term life insurance does not offer an investment option unlike Variable life insurance under permanent life insurance. Term life insurance, however, has some element of bias, as there is no equity between the old and the young in society.
With this type of insurance, the old can use it as a form of passive income. This is especially applicable to the residents in Ontario Canada as they have a larger population comprising the old age as compared to the young people. This type of insurance can be an option to monthly income earners as for them it is easier to renew their policy if it ends.
Conclusion
Life insurance coverage depends on several factors. Most precisely, it is important for the holder of the insurance to determine what he/she wants if one wants to acquire life insurance in Canada.
Therefore, consultation with those who specialize in insurance is a necessity for a newbie in things to do with insurance. The old, however, it is advised for them to opt for permanent life insurance as it has many benefits with it and wide coverage to it.
A lot of people in Canada, Ontario opt for permanent life insurance because of the benefits that come with it though it is very expensive as compared to term insurance. To end it is always better to understand the life insurance policy before taking it.