Life insurance is a contract between an individual and an insurance company in which the insurer agrees to pay a designated beneficiary a sum of money upon the death of the insured person. The life insurance policy contains all the details of the contract between the policyholder and insurer, including the benefits payable, premium charged, and conditions under which the policy may be voided.
Who needs life insurance?
There's no definitive answer to this question. Ultimately, it depends on your personal situation and needs. If you're single with no dependents, you may not need life insurance in Ontario. But if you have a family or other dependents relying on your income, then life insurance can be an important financial safety net.
Image Source: Google
If you're the main breadwinner for your family, then your death would have a significant financial impact on them. In this case, life insurance can help ensure that your loved ones are taken care of financially if something happens to you.
What are the different types of life insurance policies?
There are three main types of life insurance policies: Term life insurance, whole life insurance, and universal life insurance.
Term life insurance is the most basic and popular type of policy. It provides coverage for a specific period of time, typically 10, 20, or 30 years. If the insured person dies during the term of the policy, the death benefit will be paid to the beneficiaries.
Whole life insurance is a more permanent type of policy that covers the insured person for their entire life. The death benefit is guaranteed to be paid as long as the premiums are up to date.
Universal life insurance is a type of permanent policy that offers more flexibility than whole life. Universal life policies allow the policyholder to choose how much coverage they need and how much they want to pay in premiums.