life insurance

How do I choose the type of life insurance that’s right for me


In summary, life insurance pays an amount to your family or beneficiaries in the event of your death. They can then use the money received to pay:

  • debts,
  • child care,
  • a mortgage,
  • other current expenses.

Different types of life insurance 

There are four different types of life insurance:

  1. term life insurance;
  2. permanent life insurance;
  3. participating life insurance;
  4. universal life insurance.

The ideal life insurance for you depends on your personal situation, your needs and your goals. Maybe there isn’t just one type of life insurance that’s right for you. You may need a combination of several different products. To help you see things more clearly, seek advice from a professional, such as  a counsellor .

To make a decision, you must first understand what each type of insurance can offer you.

How does term life insurance work? 

Term life insurance can be relatively inexpensive. It provides protection for a fixed term. But it is important to know that its cost can increase with your age.

Typically, one purchases term life insurance to protect one’s family when one has significant financial obligations. For example, young children or a mortgage.

Suppose you have $400,000 left on your mortgage. Term  life insurance  of $500,000 would prevent financial hardship for your loved ones in the event of your death. They could use the death benefit* to pay off part or all of the mortgage.

How does permanent life insurance work? 

Permanent life insurance provides protection for life. It is more expensive than term life insurance, but the amount of your premiums* remains the same. After a certain age, permanent life insurance  could therefore be less expensive than new term life insurance.

(* The monthly or annual fee you pay for your insurance. Most permanent products have guaranteed premiums, meaning they don’t change. But others have an adjustable cost: their premiums may vary over time.)

How does participating life insurance work? 

Participating life insurance is a  type of permanent life insurance. It offers you lifetime protection and the opportunity to enjoy tax-efficient growth:

  • cash surrender value;
  • death benefit.

Your contract entitles you to participations*, which you can use to:

  • increase your coverage;
  • receive a cash payment;
  • reduce your annual premium;
  • produce interest by letting it accumulate.

(* Dividends are not guaranteed. You may receive dividends if the results of the Sun Life Participating Account are more favorable than the assumptions made. These results are based on factors such as investment performance, death benefits and fees to support the values ​​guaranteed in the policies. If the Board of Directors determines that there is a surplus, a portion of it may be paid out as policy owner dividends.)

How does universal life insurance work? 

Universal life insurance provides more flexibility than other types of permanent life insurance. protection. In addition, it allows for tax-advantaged savings*.

Some universal life products  come with premiums that don’t change. For others, payments increase over time. And for still others, it’s a mixture of the two.

You can invest any payment that exceeds the cost of insurance. These savings can then grow tax-free*.

(* This means that any growth within the contract is tax-free. You may have to pay tax if you cancel your contract or borrow from your contract above a certain amount. This is also true if you cancel part of your coverage.)

The right life insurance for you 

The right life insurance for you depends on your unique situation. You can see this more clearly by seeking advice from a professional, such as  a counsellor . By looking at your lifestyle and financial habits, he can help you choose the type of insurance that meets your needs. He can too :

  • describe the products to you in more detail;
  • help you integrate coverage into your overall plan;
  • answer your questions;
  • discuss your financial concerns.

It is now possible to consult most advisors by video conference. Find an advisor today.

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