CLHIA-ACCAP - Consumer Information

A guide to life insurance

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6 Term policies provide insurance coverage for a specified period (e.g., a fixed number of years, or to a set age) and then expire. A death benefit is paid only if you die during the term of the policy. Term policies are commonly available for terms of one, five, 10 or 20 years, or to age 60 or age 65. The premiums usually remain level during the specified term but increase if that term is renewed (e.g., premiums would increase every five years on a five-year renewable term policy). Most term policies are non-participating and do not include cash values or other non-forfeiture values. Hence, premium costs are lower than for permanent policies - at least when you're younger. Term Life Insurance LIFE INSURANCE POLICIES Often categorized as a permanent plan, term to 100 policies provide life insurance coverage through to age 100. Usually they don't pay dividends or include cash values, though some may provide other non-forfeiture values. Accordingly, premiums are lower than for traditional whole life policies. To compare the features of different types of policies, see the following chart. Term to 100 TIP: If your immediate obligations are large and the funds available to spend on insurance are small, go for whatever insurance policy will meet your needs now. If your choice is term insurance to start with, make sure it's renewable and convertible into a permanent policy. This will give you the flexibility to make changes later on.

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