Answer...

Here is the anser to this Frequently Asked Question.

What’s the difference between a Term Life and Universal Life Insurance Policy?

Features of Term Life Insurance:

• Less expensive than all other types of insurance, so it is good for individuals with limited budgets.
• Coverage is for a limited time period, which is perfect for temporary insurance needs.
• The limited-time nature of term life insurance is also what makes it less expensive, since the odds are that the insured will outlive the term minimal, translating into lower premiums.
• Can be renewed at the end of the term but the premiums will typically be higher.
• You could qualify for the lower premiums if you are in good health and live a healthy lifestyle.
• Provided money for family to continue living a similar lifestyle after your death.
• Pay down the mortgage or other loans when one’s spouse dies.
• Leave an inheritance to the family.
• Business uses: buy-sell agreements and business continuation

Features of Universal Life Insurance:

• Permanent insurance with a tax-sheltered investments portion built into the plan.
• Most versatile of all insurance types, so it can be highly customized to fit your unique needs.
• Flexible premium payment structure.
• The only type of permanent insurance that allows you to modify your policy as your needs change (i/e insurance coverage amount, add/remove insurance features.)
• If funded properly, after 15 – 20 years the tax free savings in the policy should equal or exceed the cost of insurance, therefore this form of insurance can pay for itself.
• The only remaining plans in Canada protected from taxation outside of RRSP’s, making it a great way to save for retirement.
• Perfect for people who think long-term and wish for their insurance plan to increase in value over time.

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