Life Insurance
Candlefocus EditorThere are two main types of life insurance contracts available; term, and permanent. Term life insurance policies are by far the most popular form of life insurance, and remain in effect for a specific period of time; typically 1, 10, 15, 20 or 30 years. When the policy is up for renewal, the insured can choose to purchase a new policy, usually for an increased premium.
Permanent life insurance, or whole/universal life insurance, remains in effect for the lifetime of the insured, provided the premiums have been paid. This policy may also provide cash-value benefits if a surrender provision is included in the policy. Permanent life insurance may provide valuable long-term financial security for your family, and shall outlive even the insured.
For the insured to receive life insurance benefits, the policy must be backed by the financial strength of the company issuing the policy. In the case of the company becoming insolvent, however, state guaranty funds may step in and honour the policy.
When considering life insurance, it is important to pick a provider you can trust and with a steady financial standing. Always research policies thoroughly and read the small-print of the contract before signing and committing to a policy. Life insurance is a financial safety net for loved ones and dependants, and should always be taken seriously.