Insurance can protect you and your loved ones from financial loss or hardship. In case of death, your life insurance gives your beneficiary a tax-free lump-sum payment. There are two main types of life insurance: term and permanent. We’ve outlined the main differences between them below.
Keep in mind that the type of insurance you need will vary according to your life stage and your goals.
Term Life Insurance: Protection for the things which you can define an end date. Ideal for your temporary needs like mortgage/debt protection, income replacement or children’s education. Term insurance covers you for a specific amount of time until it’s renewed for another term. It normally has lower premiums than a permanent life insurance.
Permanent Life Insurance: Long-term protection for your entire life. Ideal for things you cannot put an end date on. Permanent insurance costs are usually guaranteed to maintain a level premium. Some plans even have a linked investment component that allows you to grow the policy and earn interest over time.
Speak with a financial advisor to understand what the best protections strategy for you and your family.