Is Term Life Insurance Right for You?

• Why is term life insurance the choice for a number of Canadians?
• What are some of the benefits of term life insurance?
• Who should consider term life insurance?
• How term life insurance differs from other types of life insurance?
• What affects the cost of term life insurance?
• Is term life insurance right for you?

Term life insurance provides coverage for a set period of time, and it can be more affordable (depending on when you purchase coverage) and simpler than permanent life insurance products. With coverage, your rates are locked-in and guaranteed not to increase for the length of each policy term, this makes it a common choice for Canadians looking for straightforward coverage.

Let's now dive into understanding some of the benefits of term life insurance. 

Term life insurance offers a number of benefits. Three noteworthy ones are affordability compared to other types of life insurance (depending on when you purchase coverage), flexibility, and simplicity compared to other types of life insurance products. 

Term life insurance can offer a greater amount of coverage at a lower premium (the periodic payments that are made to an insurance provider in exchange for coverage) than other types of life insurance. This is because you can lock your premiums in for a shorter period of time, known as the term. And during each term, your premiums don't change. Another factor that makes coverage more cost-effective is that there is no cash value or investment component associated with the policy.

With term life insurance, you can choose the length of coverage that's right for you. For example, TD Term Life Insurance offers customers four plan types, which include 10-, 20-, and 30-year terms, as well as Term 100 Lifetime Coverage. Term life insurance policies (at least TD's) automatically renew at the end of each term except when the insured person's 80^th birthday is approaching. At each renewal period, your premiums will increase to reflect your age at that time. Most plans also offer the option to convert your coverage to a permanent life insurance policy.^1,2

Also, the tax-free death benefit payout can be used however your beneficiaries choose. For example, it could help cover daily living expenses, pay off your mortgage, or contribute to your children's education. 

The term life insurance application process can help you find a plan that's tailored to your needs, and coverage can be relatively easy to apply for. Overall, term life insurance is less complicated than other types of life insurance products. There's no investment component that needs to be managed or cash value component with potential tax implications.  

Term life can be a smart choice if you want to increase financial protection during key stages of life or for specific financial responsibilities. During these times, you should make a point of reviewing your coverage or look into getting new coverage.  

• Newly married: How would your partner manage financially if you were to pass away? With individual term life insurance, you could provide your spouse or partner with a financial resource that could help cover their cost of living should you pass away.

• Have a mortgage: How would your family manage their monthly mortgage payments in the event the primary wage earner passed away? When you have term life coverage, the death benefit can be used to pay down or off your mortgage, which could help your family stay in the place they know and love.

• If you have young children or dependents: You can apply for coverage for the years when your children depend on your income the most. The death benefit can help cover costs associated with childcare, education and household living expenses if you're no longer there to provide.

• Those carrying any significant debt: Help make sure any financial obligations don't fall to your loved ones. The death benefit can be used for loans, credit cards or other outstanding debts. 

Because term life insurance focuses on a fixed coverage period, premiums are generally lower than policies that offer lifetime coverage. The cost of term life insurance depends on factors such as:

• Your age when you apply (date of birth)
• Your sex (assigned at birth)
• Your health and medical history
• Whether you smoke
• The coverage amount you choose
• The coverage type you choose
• The length of your term

With its lower premiums and flexible term options, term life insurance can be a good way to help financially protect your loved ones and help with major financial obligations during important years. Deciding whether term life insurance is appropriate depends on a careful assessment of your financial responsibilities, long-term objectives, and personal circumstances. You can discuss your options with a TD Life Insurance licensed advisor or get started with coverage online in minutes.

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