Life Insurance Demystified!
You're probably more interested in deciding on what diaper brands, bottles and strollers to use than thinking about life insurance. But you're about to have a baby and that makes "right now" the ideal time to review your budget. Life insurance should be a part of your financial plans to protect your family.
Everyone has different dreams. Ask yourself what amount of money you'll need to achieve your goals, eliminate debt, cover a mortgage or business loan or leave something for your family. Then decide what life insurance is right for you. There are two types of life insurance you should know about: permanent and term.
Permanent insurance continues through-out your life and is a suitable way to meet long-term goals. It provides a savings component and pays the coverage amount at the time of your death to your named beneficiaries.
Term insurance is the simplest form of life insurance. It's more affordable and provides coverage for a defined period of time. When the term ends, your coverage ends. Many choose term life insurance because it's flexible enough to meet financial needs and timelines.
Different types of term insurance include:
Renewable Term - At the end of each term you can renew your coverage without a medical. However, your price will rise with each renewal.
Level Term - You can take advantage of longer terms and the price remains the same for the entire term. While you don't have an option to "renew" once it expires, many companies offer the option of converting to a permanent plan.
Convertible Term - You can convert term coverage into a permanent policy without evidence of insurability or a medical exam. You'll pay a higher price for the same death benefit, but once converted, the price for the permanent policy stays the same.
Your insurance provider will be happy to give you a free quote. Some companies will give you a quote over the phone and some will even give a quote and let you purchase online.
When you're ready to buy life insurance, know your options. Choose a product that can help achieve the dreams you have for the future. Because right now you have more important things to think about!
Information provided by BMO Insurance, a member of BMO Financial Group.