Life Insurance

Susana and Victor Melicson Insurance Services

Life Insurance

Term life, whole life, mortgage protection, universal life, credit protection... which one is for me??

There are a number of products on the market that are true life insurance products. They cover death from any cause and are payable, tax-free, directly to the named beneficiary.

	Term insurance	Whole Life	Universal Life
What is it?	Temporary insurance for a set period of time.	Permanent, lifetime protection.	Permanent, flexible contract, offers most benefits for insurance coverage and tax deferred savings.
Best fit for:	People who need large coverage for a determined amount of time (i.e. mortgage protection)	People who want a stable product for the duration of the lifetime.	People who realize their needs may change over time and want a flexible product, with the option to invest in a tax deferred product.
Premium change?	Yes, low cost for first term, increases at each renewal. New rates are part of the contract. At older age becomes prohibitively expensive.	Guaranteed for life; depending on the options selected, the premium may decrease or stop after certain period or increase to keep-up with inflation.	Depends on the options selected: premium can change every set period, be level for the duration of the contract or a combination.
Benefit change?	Doesn't change.	May increase, depending on options selected: inflation protection, addition of accumulated cash-value or paid dividends.	May increase or decease, depending on options selected and the main purpose of the contract: addition of accumulated savings, most efficient coverage for tax purposes.
Policy expires?	Expire at a certain age, usually between 65 and 80. Some may be converted to a permanent product.	No, as long as the fee is paid. After a number of years a reduced-paid-up coverage may be available and premium payments cease.	No, as long as the minimum payments are made. May take "payment vacations" if accumulated funds cover the minimum premium.
Cash value?	No	Yes, accumulates in the policy and can be used to: s increase the benefit. s purchase reduced paid-up coverage. s cash on policy cancellation.	Yes, payments in excess of the minimum amount growt tax free until withdrawn. Cash accumulated can be used to: s increase the benefit. s take a "payment vacation" s withdrawn for any purpose (tax liability may occur)
Taxation	Tax-free in the hands of the named beneficiary. By-passes probate process and fees.

Other products, offered through lending institutions, have various drawbacks, in addition to higher costs when compared to life insurance products:

Mortgage, loan or credit card balance insurance have major drawbacks:

declining benefit: the amount insured is the balance of the mortgage or loan and is reduced as the debt is paid-up.

limited purpose: can only be used to pay the balance of the mortgage or loan.

joint-life policy: made-up in the names of the spouses taking the loan; once the benefit is paid, the policy expires, leaving the other spouse un-insured.

limited benefit: in case of disability or loss of employment the payments are limited in duration and cover only the interest portion of the loan.

	Accident insurance: covers only certain risks, usually death from specific types of accidents.
	Group insurance through the workplace or professional associations: expire at the termination of employment or membership in the association. In difficult economic times the employer may cancel the policy or reduce the coverage. A personal policy puts you in control of the decisions regarding your life insurance policy.

We can explain in detail the benefits for you of the various options available and customize your plan according to your needs. We represent companies with competitive products. Periodic reviews are usually necessary to assess lifestyle changes to keep you covered according to your needs.

Please contact us to request more information.

Disclaimer: The information provided here is believed to be accurate at the time it was published. This information is general in nature and should not be construed as legal or financial advice. Only a licensed life insurance agent can provide personal advice based on the client's situation. Some products are not offered in all jurisdictions.