Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Runner-up for no medical
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for universal life insurance
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for decreasing term coverage
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best life insurance for the self-employed
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Blue Cross is a great option if you want both life and disability insurance under one policy: their tangible hybrid plan. Health insurance is their specialty, though; not life insurance.
Pros and Cons
Pros
Get up to $1M in coverage, plus the plan converts to a permanent one at age 56.
Option to add riders like health, dental and disability to your life insurance policy.
Cons
The only term lengths available are 10, 20 or 25 years.
Whole life insurance coverage only available up to $500,000 for ages 18 to 70.
No standalone critical illness insurance, it must be added as a rider to your life insurance policy.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for cancer survivors
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for credit union members
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
With preferred rates for eligible Canadians, CUMIS life insurance could be a good choice if you're a credit union member, but there are better options otherwise.
Pros and Cons
Pros
Variety of add-ons and riders available (for an extra fee).
Large variety of policy types from term, to whole, to universal, and children's coverage.
Cons
Only available through credit unions and cooperatives.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for participating life insurance
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for seniors and no medical life insurance
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Top pick for seniors, especially for those with health issues that would get them declined or charged sky-high rates elsewhere. Most plans let you skip medical exam.
Pros and Cons
Pros
No health exam for simplified issue & guaranteed acceptance plans.
Known for fast processing times, some get approved within 24 hours.
Established player in the no medical life insurance space.
Cons
More expensive than traditional term life insurance.
Some plans are deferred by 2 years, meaning no death benefit if you pass before then.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for short-term life insurance
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for whole life insurance for children
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Desjardins offers one of the most affordable whole life policies for kids. Unique offering of 5 Pay which is the ability to pay the policy in full within 5 years.
Pros and Cons
Pros
Number of riders like children’s accidental fracture and guaranteed insurability.
Strong brick-and-mortar presence in Ontario and Quebec.
Cash value options available, with a dividend scale of 6.2%.
Cons
Presence outside of Ontario and Quebec is limited.
Children’s Life Protection policy can be converted to permanent, but coverage only goes to $20K.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best life insurance for smokers
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for wealth transfer to children
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Runner up for life insurance for children
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best life/disability insurance for the hard-to-insure
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Humania's Insurance Without Medical Exam asks only 6 questions and is issued immediately. Get disability & critical illness insurance with no extra questions.
Pros and Cons
Pros
Insurance Without Medical exam includes life, critical illness, and disability insurance.
Get $5K-$300K in coverage.
Cons
Will not pay out death benefit for a pre-existing condition for 1-2 years (depends on the policy)
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for business owners life insurance
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for permanent life insurance
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for parents & homeowners
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Runner-up for best term life insurance
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for existing customers
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for whole life insurance with cash value
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Policies are pricier, but Sun Life has the highest dividend scale for whole life insurance in Canada. Good option for high-net-worth individuals and has perks like succession planning.
Pros and Cons
Pros
Very experienced advisors, some with 30+ years of experience.
Range of options for cash value life insurance.
Single & joint policies available.
Cons
Premiums are higher than competitors
Funds are expensive and investment options limited to their available funds.
Check their MERs (management fees) against other companies.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for simplified & guaranteed issue life insurance
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Known for its variety of no medical, simplified issue and guaranteed accepted life insurance products. But make sure to compare premiums with other no medical providers.
Pros and Cons
Pros
Multi-contract discount, refunds up to $100 if a referral buys UV within 1 year.
No health exam needed for up to $500,000 in term & $150,000 in permanent coverage.
Cons
Only available in Quebec, Ontario and New Brunswick
Prices for their simplified whole life policies look higher than CPP and Beneva.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Second runner-up for best term life
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Runner-up for smokers life insurance
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Laura McKay is the co-founder and COO of PolicyMe, Canada's fastest-growing digital life insurance company. In 2021, she was named one of the Women of the Year by Bay Street Bull. Laura has a Bachelor of Mathematics from the University of Waterloo. Her degree focused on Actuarial Science, which included learning about mortality risk, the basis of life insurance pricing and valuation. After her degree, she was employed by Manulife and Munich Re in Actuarial Science. Laura then worked at famed management consulting company Oliver Wyman in New York from 2013-2018. In this position, she worked with many Fortune 500 life insurance companies and helped them develop growth strategies and solve operational problems and regulatory issues.
November 9, 2023
•
8 minutes
Peer reviewed by Tobin Tuff
,
Certified Life Insurance Advisor
PolicyMe content follows strict guidelines for editorial accuracy and integrity. Learn more about our editorial guidelines.
Term covers you for a period of time, such as 10, 20 or 30 years.
3. Cash value:
Whole life insurance policies accumulate cash value.
Term life insurance policies don’t have an investment component.
4. Payout:
Whole life insurance pays out upon your passing, whenever that may be.
Term life insurance only pays out if you pass away within your coverage period.
PolicyMe offers some of the best life insurance rates in Canada for term life insurance, coupled with a seamless online experience. Get a no-obligation quote online in seconds.
If you're looking for the TL;DR version for the main difference between term and whole, check out the chart below:
Who is term life insurance for vs whole life insurance?
Whole life insurance is suited for high-net-worth Canadians who need it for estate planning. And life insurance is only meant to replace your income in the event that you pass away. It's not designed to help you invest your money efficiently.
Canadians are getting wise to this. According to the Canadian Life and Health Insurance Association, term life insurance grew in popularity by 39% in 2020, while whole life insurance only grew by 12%.
There are many better, more profitable ways to invest your money other than whole life insurance. Options like an RRSP or TFSA will generate more money for your loved ones after you're gone.
Take a look at this quick explainer video for more information about how term and whole life insurance compare.
Is term or whole life insurance better?
We’ve outlined the difference between term and whole life insurance. But how can you decide which policy is actually best for your family’s needs?
Here are a few things to keep in mind as you make your decision.
When to pick term life insurance
Term life insurance can protect your family financially. For example, if you pass away but still have financial debt (like a mortgage), term life insurance acts as additional income to help your family manage those obligations.
In Canada, term life insurance is best for those who want an affordable option as it’s typically cheaper than whole life insurance, especially if you’re young and in good health.
If you want to save money and reallocate portions of your budget, a cheaper term life insurance policy means you can save what you would have paid for a whole life policy and choose to put that money elsewhere. For example, you can invest the difference.
When to pick whole life insurance
Whole is best for Canadians with high net worth individuals. There’s a risk of losing your policy altogether if you fall behind on the payments so make sure it’s a plan you can stay on top of over the long term.
If you have dependents that you’ll leave behind when you pass away, the death benefit from whole life policies is a valuable inheritance. Anyone you claim as beneficiaries on your policy will receive direct payouts in the event of your death, ensuring their financial futures.
If you’re raising a child with disabilities or supporting an older family member,whole life insurance can establish a trust fund to ensure they will continue to be taken care of after you’re gone. Speak with your attorney about how to set up this type of trust. There may be other, more efficient ways of protecting them financially.
For the average Canadian family's needs, term is often the better option.
Life adds up; if you’re like most families whose monthly pay supports expenses like groceries, debt payments, savings, etc. an affordable term policy might be right for you.
Cost comparison: term vs whole life insurance in Canada
1. Temporary vs. guaranteed life insurance payouts
A whole life insurance policy is guaranteed to pay out eventually, as long as you don't die in a way not covered by your life insurance policy.
Term life insurance only pays out if you pass away during your term length. Because term is meant to help protect you for a “temporary” time period, like while the kids are young or while you’re paying off your mortgage.
2. Higher upfront costs vs. fixed policy rates
You're more expensive to insure when you're older than when you're younger. Insurance companies compensate for this by charging more for permanent life insurance from the beginning.
In a sense, you're paying upfront while you're young and healthy and should be paying lower monthly premiums. This is because the insurance company knows you'll likely need to be covered when you're older and at higher risk of passing away. In fact, they'll probably need to cover you until you pass in your 80s.
On the other hand, you’ll pay a fixed monthly premium with term life insurance as the payments are consistent throughout the entire duration of your coverage.
3. Fixed coverage periods vs. lifetime premiums
Term life insurance works to protect your loved ones during a specific period of time when you actually need financial protection via life insurance.
This could be when you have kids who depend on you or you have large loans such as a mortgage or school loans that you're just starting to pay off.
You're only paying for coverage for 10, 20, or 30 years when you're at a lower risk of passing away as opposed to whole life insurance that sustains throughout your lifetime. As a result, term life insurance is a lot cheaper than whole life insurance.
And better yet, PolicyMe has some of the most affordable term rates in Canada. Check out the comparison table below to see how we stack up against other companies.
Get the most affordable term insurance with the same high-quality coverage with PolicyMe term life insurance. Get $10,000 of free life insurance for each of your children (and kids to be) on top of your policy. No extra costs or hidden fees.
To make the right decision with coverage, it helps for you to know the meat and potatoes of the differences between term and whole life insurance. Let’s break down exactly what each option entails below!
What is whole life insurance?
Whole life insurance is a kind of permanent life insurance where the policy's coverage lasts for your entire life and the life insurance premium is designed to build cash value. But if your TFSA and RRSPs aren’t maxed out, it’s not a very efficient investment method.
It sounds like a great type of policy in theory, but there are other costs that could make it less beneficial. It’s far more expensive and inflexible than other life insurance policies.
And whole life insurance policies are also full of fine print, making them complicated and difficult to understand. This is an actual example of a whole life insurance contract:
You can read our comprehensive guide to whole life insurance to dive into deeper detail about the benefits of whole life insurance, how the cash value system works, and also more information about pricing.
What are the pros and cons of whole life insurance?
There are a few considerations to keep in mind when it comes to whole life insurance.
Whole life insurance pros
Permanent policies: Whole life insurance never expires, so you can keep it for your entire lifetime.
Guaranteed savings: Even though it's an expensive way to invest your money, it can force you to save funds every month.
Whole life insurance cons
Price: Whole life insurance is a lot more expensive than term life insurance, up to 10 times more!
Complicated: Permanent life insurance policies are much less straightforward than term insurance. You need to understand all the fine print before buying this kind of policy.
Inflexible: There are usually penalties for cancelling early.
High interest rates: In most cases, the rate of return you'll receive on the investment component of this policy is lower than what you'd get with alternative options, like RRSPs and TFSAs.
What is term life insurance?
Term life insurance coverage works by providing protection for a predetermined time period, usually between 10 to 30 years. If you pass away during the agreed-upon term, your beneficiaries will get the amount that you’re covered for.
Your loved ones can then use this death benefit to replace your income, pay off debts, support children’s schooling, or cover other living expenses.
In Canada, term life insurance policies have much lower annual premiums than whole life insurance policies. But the premiums will probably increase if you renew the policy. Even with higher annual premiums, it's still a better financial investment than whole life insurance.
Term policy contracts are also easier to understand and transparent, like this sample policy from PolicyMe:
What are the pros and cons of term life insurance?
Straightforward: Term life insurance is straightforward and the policies are easy to understand. You don't have to worry about cancellation charges, hidden fees, or other risks, like the things that are usually buried in fine print.
Price: Term life insurance can be 6 to 10 times cheaper for the same amount of coverage. The average cost is about $30 a month for term versus over $150 a month for whole life policies. In fact, PolicyMe offers a discount of 10% on their first year of premiums for couples life insurance.
Flexibility: You can cancel term life insurance at any time.
Term life insurance cons
Expiration: Term life insurance eventually expires. If you still want coverage after that point, you'll need to shop around for a new policy. The good news is that most term life insurance products offer features that let you continue your coverage after the term ends, without having to show proof of good health, or go through additional medical underwriting. This gives you some protection against getting sick, because your renewal is guaranteed.
PolicyMe removes cost barriers to term life insurance, with the same high-quality coverage at a better price. And by cutting out inefficient steps from the admin and application process, we’re able to offer the lowest rates in Canada.
Term vs. whole: how does the application process compare?
The application process for both term life insurance and whole life insurance is relatively similar, if not completely the same. It will depend on the particular company you're sending an application to. The reason the application process is so similar because life insurance companies will require the same amount of information from an applicant, regardless of the type of life insurance they're applying for. Of course there are exceptions to this, for example: simplified issue life insurance or funeral expense insurance.
But strictly looking at term and whole life insurance, the main difference in the application process will come down to the point where you choose policy specifics (like term length, riders, investment components, etc.) Otherwise, you can expect almost the same course of action when applying for either.
Key takeaways: term vs whole life insurance
At a high level, these are the major distinctions between term and whole life insurance:
Term life insurance lasts a fixed period of time, typically ranging between 10 to 30 years
Whole life insurance is considered a permanent form of coverage that lasts for your entire life
Term life insurance is typically the more affordable option for families
The bottom line is that we believe that term life insurance is the right choice for most Canadian families. Whole life insurance is more suitable for those with permanent dependents or who are wealthy individuals.
FAQs: Term and whole life insurance 101
Which is better for seniors, term or whole life insurance?
Which is better for seniors: term or whole life insurance? Well for starters, term life insurance is the more affordable option and you can also receive coverage into your golden years if you renew it in time.
Term life insurance will also help your loved ones pay off debts, maintain their lifestyle and support them in a tough time.
Can I convert my term life to whole life?
Most term insurance policies have something called a ‘term conversion rider' included in the terms of your agreement, which would allow you to convert your policy from term to whole life insurance.
But watch out: there are extra costs associated with this (and most other riders, too).
Can you switch from whole to term life?
You can switch from whole life insurance to term. But in most cases you have to cancel your existing policy to do this. There might also be penalty fees you'll have to pay out of any earned cash balance, resulting from cancelling your policy early. These fees will be taken out of any value in your account, prior to it being paid out to you.
Unfortunately, because you need to cancel your whole life policy before you can switch to a term policy, your costs will need to be reevaluated at the time that you create your new term agreement. This means, your premiums will likely be higher than they would have been if you had just signed up for a term policy in the first place.
What is the difference between long-term care and whole life insurance?
A long-term care life insurance policy helps cover the cost to administer long-term care to senior citizens who require assistance throughout their day-to-day lives. This includes costs to assist with routine daily activities like bathing, dressing, or getting in and out of bed.
Unlike whole life insurance, which has more of a cash value investment attached to it, long-term care insurance reimburses senior citizens for the cost to help them get through their days.
Is whole life insurance a scam?
No, whole life insurance is not a scam. But it is a far more expensive life insurance policy than term life insurance because it provides lifelong coverage and also includes the cash value component.
And caution: commissioned life insurance advisors often push it because it’s the more expensive option.
Do I need both term and whole life insurance?
No, you do not need to acquire both life insurance policies for your own needs. But your needs will likely change over time.
And as those changes become apparent you may require multiple policies that hybridize both term and whole life insurance incentives to provide the best possible protection for your loved ones at the most affordable price.
What type of life insurance should I avoid?
The type of policy that works for you depends on your family’s specific needs. The policy that works for you will depend on your specific needs that include details about your lifestyle, your current health, and any dependents you may ultimately be responsible for supporting.
The bottom line is that you should avoid buying more life insurance than you need.
Laura McKay
COO & Co-Founder
About the Author
Laura McKay is the co-founder and COO of PolicyMe, Canada's fastest-growing digital life insurance company. In 2021, she was named one of the Women of the Year by Bay Street Bull. Laura has a Bachelor of Mathematics from the University of Waterloo. Her degree focused on Actuarial Science, which included learning about mortality risk, the basis of life insurance pricing and valuation. After her degree, she was employed by Manulife and Munich Re in Actuarial Science. Laura then worked at famed management consulting company Oliver Wyman in New York from 2013-2018. In this position, she worked with many Fortune 500 life insurance companies and helped them develop growth strategies and solve operational problems and regulatory issues.
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