The Types of Permanent Life Insurance

Posted on March 2, 2015 and updated December 2, 2019 in Infographics, Life Insurance Canada News 1 min read

There are two major types of life insurance that you could own. The first is term life insurance which is a product that will cover you for as long as the term is. An example of term life insurance is Term 20 which will cover you for 20 years after which your premium rate would typically skyrocket.

The second type of insurance is permanent life insurance. Just like the name suggests, permanent life insurance will cover you for your entire life. There are three forms of permanent life insurance.

The first is whole life insurance. This combines a permanent life insurance plan with a savings component. The second is universal life where cash value can be separated from the life insurance coverage. The last type of permanent life insurance is called Term to 100 which offers the bare minimum of permanent life insurance.

Our infographic goes into some of the pros and cons of each type of policy.

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Brian So
Brian So

Level cost of insurance universal life is a cheaper alternative to term-to-100. For example, SSQ offers a UL policy for a 35 y/o male non-smoker $100,000 of coverage for $59.17/month, while the same coverage for T100 with the same company costs $63.36/month. Four dollars and change per month may not seem like a lot but every dollar saved can add up over the years. As you mentioned in the infographic, not many insurers provide T100 and thus premiums are not as competitive as UL. A UL policy also provides the advantage of tax sheltered investing, should one decide to participate… Read more »

LSM Insurance
LSM Insurance

You make some good points Brian. The Term 100 is a little less expensive than the level cost UL if you change the mode from monthly to annual. IMO more people should be taking advantage of paying their life insurance annually, but that’s another topic.