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Most people understand the need to protect those close to them by purchasing life insurance, a financial shield to defend your loved ones in the unfortunate event of your death. It gives you an extra measure of freedom, letting you focus on getting the most out of life. Once you have made the decision to buy it, there is another matter that commands your attention – term life insurance vs permanent life insurance.
If you are the main breadwinner for your family, or make major contributions towards the family’s income, then the need for coverage is even more urgent. Accidents and unexpected fatal illnesses are rare, but they do happen, and you do not want your family to be burdened with unpaid debts and other financial concerns should such an event befall you.
Term coverage is a type that is provided only for a specific span of years. Companies offer different terms, or periods of coverage – for example, you can find typical term life insurance policies of five, ten, fifteen, and twenty year periods, as well as other time periods. And if one company does not offer a certain term, most likely another one will.
This type of coverage is often chosen because it offers relatively low premiums; however, in this as in many other things, you get what you pay for. Term coverage is inexpensive precisely because it expires in a certain number of years, and is generally granted to you in the event that the term ends prior to the current life expectancy.
In short, it has low premiums because the benefit is unlikely to ever be paid. Another factor to consider is that, after your first term expires, getting another policy may be very expensive, or even impossible, depending on your age. The closer you get to the average Canadian life expectancy of 81.1 years, the less willing insurance companies are to offer you affordable term life insurance.
Permanent coverage, by contrast, offers you an unlimited term that is in effect for as long as you continue to pay the monthly premiums. In the competition of term life insurance vs permanent life insurance, permanent clearly has an edge for lasting security and peace of mind.
Premiums are higher than equivalent coverage amounts under a term plan because the insurance provider is aware that sooner or later, it will have to pay the benefits offered by the plan. Most people feel it is well-worth the extra cost as it gives the steel-firm assurance that your beneficiaries will receive their full benefits whether you die seven minutes or seventy years after enrollment in the plan. Unless you find a single premium plan – which requires a very large up-front investment – you will need to make regular payments in order to keep your life insurance benefits active.
The protection it offers is ironclad, and you will not need to fear losing coverage in the case of developing a terminal illness. Rather than being subject to the limitations of a generic contract, this style of coverage places its continuance in your hands, allowing you to maintain it for as long as you live.
The old saying declares that “if you want something done right, do it yourself” – and permanent life insurance gives you the opportunity to personally arrange for the financial future of your loved ones, rather than counting on the vagaries of term policies that will run out regardless of your state of health or desire to extend them. This is a very important consideration in choosing between term life insurance vs permanent life insurance.
Permanent coverage gives you positive control over the future which term life coverage cannot rival, and ensures that your family will always have the financial resources they need to maintain a civilized level of comfort.
There is nothing morbid in obtaining life insurance – instead, it relieves you of considerable anxiety and lessens the matters on your mind. A well-chosen policy will give you a sense of confidence and optimism, knowing that your spouse, children, and other close relatives will not be left destitute in the event of your death.
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Source by Jason C Martin
