Understanding Insurance: Term Insurance
If you’ve taken a new job, chances are your company has asked you to sign up for company-provided insurance — which is great. But if that plan isn’t giving you everything you need, understanding the different types of insurance can help you find the right fit for your needs and priorities.
A good place to start might be term life insurance. Term life provides coverage during specific time periods and pays out when death occurs within that specified period of time. Unlike whole life insurance, term doesn’t require regular payments or an exam and is less expensive as well as simpler than whole life policies because there are fewer policy fees and riders to pay for over time.
There are a few things to keep in mind when looking at term life insurance. First, be sure to read your policy’s definition of what is considered “death.” It might include some conditions that aren’t covered by the basic term life policies in the market: For example, if you have a heart attack, you might not receive a payout from a typical term policy.
Another thing to consider is inflation protection or additional death benefit coverage riders. These can help offset the effects of rising costs over time due to inflation and are flexible enough for changes in life circumstances such as starting a family or buying your dream home.
Comparing term policies
When deciding on your insurance plan, it’s important to look at the whole picture. While term life might be a good fit for some policies, it might not be the best choice for you if you are considering long-term care, for example. Or if you have a dependant that would continue to need financial support if something happened to you. A comprehensive insurance plan will take all of these factors into consideration and help ensure that your wishes are met in the event of an untimely death or other unfortunate event.
That’s why it’s so important to talk to a financial professional before signing up for any insurance policy. They can review the specifics of your situation and recommend what is likely to be the best fit for your circumstances. They can also help you decide if a term policy is right for you and if so, help determine what rider options might be appropriate.
It’s worth it to take the time to really understand how insurance works and how it can work for you, so that you can choose a policy that will give you the peace of mind needed to focus on living life with no regrets.
Before buying any type of insurance, there are some things that it’s smart to understand. This Financial Basics series will look at different types of insurance, what they offer and which might make sense for your unique needs.
Here’s to financial peace of mind.
-Jennifer Mendelsohn, CFA, Director, Retail Distribution and Marketing, Sun Life Financial Canada
[/ARTICLE] [ARTICLE END] I know this is a long read (well it was for me). Hopefully you can take a few things from this article and apply it to your own life. Let me know your thoughts in the comments! You can also connect with me on my Facebook Page , Twitter , Instagram or Google + . Have any questions about life insurance? Make sure you fill out the application for a free quote here and let's see where we can go from there! A version of this article originally appeared on TheDailyWorth.com . Click here to see an archive of my Forbes articles. My name is Tracy Brackett and I am a Personal Finance blogger, speaker and professional money coach. Through this blog I share how-to advice for everyday Australians who are tired of not having enough money to buy the things they need and want. The aim is to help you build the life that you want, not live someone else's version of it. Read my other entries about budgeting, saving money on everyday purchases , travel hacking , superannuation and more. This blog accepts free product samples as well as sponsored content . To learn more, read my disclosure policy . The thoughts expressed are all my own. Photo credit: Microsoft Office Gallery - OJO Images / Visual Land / Getty Images UPDATE: Since writing this article, I have changed jobs. I no longer work for Sun Life but I still stand by the information in this article. The information in the link below will now take you to my new blog, MoneyMutable . ---> My Annual Review of Term Life Insurance For Australians <----- UPDATE: This article was updated on October 19th 2016 with a new title, some minor edits and an updated picture.
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Conclusion: The information contained on this website is provided for general information purposes only. It does not constitute financial or other advice and should not be relied upon as such. All my information has been compiled from sources deemed reliable, however please note that I cannot attest to its accuracy. Any opinion expressed here is my own personal opinion and does not represent an official statement by any company or organisation mentioned. If in doubt, consult a licensed financial adviser before making any major financial decision. This site is operated by a non-profit entity established to help you make a positive difference in your own personal finance situation and that of your loved ones' by sharing knowledge, experiences and wisdom regarding personal money matters with others.
This website contains affiliate links (e.g.