Whether you’ve been vigilantly stowing away spare pennies since birth or burning through your cash flow each cheque with reckless abandon, we don’t care. What we do care about is families being protected from the wrenches of life that hit all too quickly and render any preexisting plans useless. We all know someone who’s lost it all from some unpredictable event. For us, it raises the question, “Did they see an insurance broker before losing their income?” It’s a question of responsibility and one that can come back to haunt anyone regardless of age.

Mitigating those risks is what life insurance brokers do. To that end, there is a laundry list of insurance plans and forms of coverage, each of which breaking down the rules, stipulations, requirements, regulations, and legalities into thousand-page documents. Have you ever read the Terms of Service agreement when you register a new account online? No? Then are you actually going to read the terms of each insurance plan to ensure your coverage is ideal for your situation?

Probably not.

When an Insurance Broker Makes Sense

Would you know when it makes sense to go with universal, whole, or term life insurance?

What are the benefits of each?

Who is the right person for each and when?

There’s no reason to spend countless hours plugging through volumes of text on the morbid topics of life and disability insurance. Especially when you have an advisor by your side to assess your position and make recommendations from a longitudinal, experienced perspective.

If we could give you a crash course on life insurance, we would. The reality is that the “crash course” might take upwards of two years, and no one is jumping to get their Associate’s Degree in Life Insurance.

So, When Should I Get a Term Life or Permanent Life Plan?

The answer is (no surprises here) it depends. That’s where we come in.

Let’s start with a simple definition that divides the two: permanent life plans typically cost more in the early years, but offer coverage over a person’s entire life; term life is a set period of coverage, typically around 30 years. If you die during the coverage period of either plan, your beneficiary receives the full payout. If you don’t, well, that’s even better.

Term life is pretty simple. Pay a set amount in premiums and receive a set amount of coverage.

Now, if you opt for a term life insurance policy, you’ll (hopefully) reach the expiration date of the policy and begin wondering whether it’s worthwhile to continue your coverage. Naturally, as you age your coverage cost increases. Since you are now purchasing a new plan, you’ll have to pay a new premium amount monthly.

Whole life insurance has a few benefits over term life insurance, but bear in mind that it requires stability in finances to truly pay off.

First, it offers tangible cash value. As you put money into a whole life plan, that money becomes an asset that you are able to take a loan against, or one day cash out before you die. Since it accumulates in value with age, it can turn into a substantial payout. Or you can hold the plan and ensure the next generation of your family has a sizeable chunk of money to work with.

There’s one more benefit to whole life, and that is the locked-in nature of the premiums. Once you’ve chosen a whole life plan, the insurer is unable to make any changes to the policy, meaning there’s no need to worry about the cost changing for the same coverage (an issue for some who renew their term life policies).

“Whew, that’s a lot of info on life insurance to digest.”

Yep, that’s why you should probably go see an insurance broker. Life insurance isn’t scary. For some, it’s an investment. For others, it’s a safety net.

Either way, life insurance is inseparable from responsibility. Cover your bases. Call a broker, assess your options together, and set aside a bit of money each month — simple!