Term insurance comes with a variety of terms from 5 years to age 100. One variable that is often overlooked is, whether the insured should go for a level term policy or a decreasing term life plan.
Below is a summary of the differences between the two coverages:
Level Term Insurance
Fixed premiums for a stated term.
Level tax-free death benefit.
Generally, convertible to a term policy without a medical. Some companies, such as Primerica, do not offer a conversion feature in their level term line-up.
Decreasing Term Insurance
Fixed premiums for a stated term.
Death benefit decreases over the life of the term.
Not convertible to a permanent policy when sold through lending institutions.
A few life insurance companies in Canada do offer level term and decreasing term policies. Most notably, La Capitale offers a very competitive level and decreasing term line-up.
The following looks at the pricing for a 35-year-old, male non-smoker applying for $500,000 of level Term 30 coverage and decreasing Term 30 coverage:
La Capitale $500,000-Level Term 30: $80/month
Death benefit at the end of 10 years: $500,000
Death benefit at the end of 20 years: $500,000
La Capitale $500,000 Decreasing Term 30: $58.33/month
Death benefit at the end of 10 years: $437,500
Death benefit at the end of 20 years: $300,000
You can get more detailed quotes on level term life or decreasing term life by visiting our Term Life Instant Quote Page, or by contacting us at 1-866-899-4849.
