Financial Security

The living benefits allow the policyholder to access cash while still living. Life insurance can help protect the financial security of the people who rely on you, such as a spouse or children. Life insurance can be used to provide a tax-free amount upon your death to the beneficiary or surviving family, to pay any debts and final expenses, or leave a legacy for future generations, burial costs and even to pay the balance of the mortgage. The Life Insurance plan is an essential part of a good financial plan, depending upon age, gender, health, medical history, and lifestyle. For example: with a medical emergency, an accelerated death benefit rider may pay out a portion of your death benefit to payout medical expenses, among other uses. Further, the beneficiary will receive the death benefit after the reduction of the used portion of the policy already.

Life insurance = Financial security

The two main types of life insurance in Canada:

• Term Life Insurance is well-suited to shorter-term protection 
• Permanent life insurance is well-suited to supplement retirement income or for children’s education.

1. Protection: Life insurance works as a savior at the time of adverse financial consequences of the insured’s death. It has death benefits, for example, survivors of your family could pay off the mortgage debts, bills, funeral expenses, income replacement, and more. Life insurance is more like a protector, keep your family protected in a disastrous event happened.

2. Removes Worries: Life insurance policies have favorable tax benefits and a conversion option to permanent coverage. Term life insurance is an affordable life insurance protection for those who need immediate coverage but have limited funds to work with. The policyholder can choose 10, 20, or 100-year term life insurance. 

 3. Cash Value: For cash value benefits, one needs to go for a permanent life insurance policy. Cash values will grow tax-deferred over time and withdrawals are generally income-tax-free. Cash value has the advantage of making purchases down the road, such as paying off debt, buying a home, investing in real estate. 

4. Tax Benefits: Life insurance policies have tax-free Death benefits, the cash value, and all policy loans are accumulated tax-deferred, and the important cash value withdrawals are tax-free as long as it doesn’t surpass the premiums paid into the policy. 

5. Flexibility: Life insurance policies are a much easier and flexible long-term investment plan. There is no restriction on policyholder families to spend death benefit in a certain area, they are free to use it on they require whatever. And another advantage that you have the flexibility to choose the policy coverage, beneficiary, duration, and premium, etc. Moreover nowadays it extremely affordable insurance, particularly term life insurance.

Types of life insurance based on Financial Insecurities