Types of Life Insurance Policy in Canada?

Different Type of Life Insurance

Although 85% percent of North American’s agree that most people need life insurance, only 62% percent actually buy it. One reason for this disconnect between intention and action is that the seemingly convoluted nature of life insurance acts as a barrier to purchase.

The good news is that life insurance doesn’t need to be complicated! Use the chart below to get an idea of the different types of life insurance. Then speak to an agent to get a clear assessment of which alternative is right for you.

Life Insurance Types and How They Differ

Life Insurance TypePurposeSources for More Information

Term Life Insurance

Designed to meet insurance needs that will last for a finite period of time. Common examples include a mortgage, child rearing, and education. As you age, this type of insurance becomes more expensive and eventually is no longer available or affordable. It is available for terms of 5, 10, 15, 20, 25, and 30 years until age 65. There is also a version available to age 100 which is a cheaper alternative to permanent insurance.Term Life Insurance

Permanent Life Insurance

Designed to provide cash for your family and loved ones upon death, whenever that occurs.

It can also be used for a number of tax favored strategies, both personal and corporate.

Permanent Life Insurance

Whole Life Insurance

Designed for people who want both guaranteed cash values as well as a potential for significant increase in coverage and cash value based on dividends or credits from the insurance company. The guarantees and dividends have frequently outperformed Universal Life polices over long periods.Whole Life Insurance

Universal Life Insurance

Designed with two primary purposes:

  1. When combined with guaranteed Investment options (similar to a GIC), it can provide guaranteed lifetime coverage at some of the best rates.
  2. When combined with a wide variety of investment options that mirror some well-known mutual funds, it can provide significant tax free growth with tax free payments to the beneficiaries (in most cases).
Universal Life Insurance
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All product names, trademarks, and trade names are the property of their respective owners. The Insurance Council (BC, AB, SK, MB), Financial Services Commission (ON), Chambre de la Sécurité Financière (QC), The Superintendent of Insurance (NB, NL, PE, NS) are the provincial and federal authorities that regulate, supervise and enforce standards for life insurance professionals. IDC member websites include: Life Insurance Newspaper, Employee Benefits Newspaper

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