{"id":196,"date":"2017-02-10T16:46:48","date_gmt":"2017-02-11T00:46:48","guid":{"rendered":"https:\/\/mgfadvisory.ca\/news\/?p=196"},"modified":"2018-08-22T16:47:24","modified_gmt":"2018-08-22T23:47:24","slug":"what-is-term-life-insurance","status":"publish","type":"post","link":"https:\/\/mgfadvisory.ca\/news\/2017\/02\/10\/what-is-term-life-insurance\/","title":{"rendered":"What is Term Life Insurance?"},"content":{"rendered":"

Imagine you were sitting down at a nice dinner party with some friends and some new friends and the conversation turned to the future. Now, no one likes to openly discuss money, but investments? Sure, I know friends of mine who don\u2019t work in the investment and insurance industry who talk about where they\u2019re putting their money all the time.\u00a0<\/span><\/p>\n

Now imagine that someone at the party asked you what sort of life insurance you owned. What would you tell them?<\/p>\n

First off, it\u2019s important to let them know there are two main types of life insurance, term insurance and permanent insurance. Watch their eyes light up! Then you\u2019d tell them that you have term insurance through a group investment plan with your employer, or you might tell them you own an individual plan, in which case you could own term or permanent insurance.<\/p>\n

The Majority of People Own Term Insurance<\/h3>\n

Why do people own term insurance? Well, term is what<\/span>\u00a0I like to call rental insurance.\u00a0 It costs very little each\u00a0month for the amount of life insurance coverage you want. This is really helpful for young families with kids, mortgages, and organized (alright, tight)\u00a0budgets that\u00a0need life insurance protection.\u00a0 <\/span><\/p>\n

Term insurance is also generally renewable for new terms without need for a new medical exams. Term insurance is important in the event you need life insurance coverage and you contract a medical condition that could prevent you from getting life insurance in the future. You won\u2019t lose your term insurance.<\/span><\/p>\n

The catch?\u00a0 As you get older and a term expires, the premium costs go up. In some cases, quite\u00a0significantly. Costs can rise so much that some may choose to no longer carry some or all of their coverage. This\u00a0suits the insurer just fine as they get to keep your premiums that have already been paid and they don\u2019t have to pay you or your dependents a death benefit. Hence\u00a0the rental concept.<\/span><\/p>\n

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How Can You Prevent Cost Escalation?<\/span><\/h3>\n

So, how do you buy a term insurance policy that comes with escalating premiums that become too expensive? <\/span><\/p>\n

Here are a few suggestions:<\/span><\/p>\n

1. Pick a higher Term!<\/span><\/strong><\/p>\n