How do I know if permanent or term insurance is for me?
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- Advisor: First Canadian
- Posted on: July 15th 2009
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Business and Professionals
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What kind of Insurance should I get?
There are 2 main types of Insurance - Permanent and Term Insurance.
Term insurance is exactly how it sounds. It is designed to cover you for a specific risk and for a specified time.
It is a good form of coverage if an individual has a specific budget and a specific time frame to be covered. Premiums in term insurance tend to be less expensive than permanent insurance in the beginning. However, they rise in cost after a specific time. If you were to buy a 10-year term the premium would increase after the 10th year. Eventually it becomes very costly to keep this coverage.
Think ahead and ask yourself: “Will I need this Insurance when I’m older?” Term insurance, although cheap in the beginning, increases dramatically over your lifetime and most people tend to outlive these policies. Again, I stress, it is a great temporary cost-effective coverage but it is not designed as a permanent solution.