A term life insurance policy expires when the life insured attains the age specified in the plan. The premium stays the same and is guaranteed not to increase for the length of each term. At the end of each term, the policy automatically renews, and the premiums increase to reflect the customer’s age at that time. Additionally, term-life policies do not build cash value and will not pay a benefit if the policyholder dies when the policy has expired.
- It is often more affordable and simpler than other types of permanent life insurance.
- Your rates are locked-in and are guaranteed not to increase for the length of each policy term.
You as the customer have the choice at renewal to either let the policy automatically renew to apply for a new policy, or to convert to a permanent life insurance policy the insurance company may offer.
As the name suggests, permanent life insurance does not expire. It is typically designed for lifelong protection, so your beneficiaries will receive a death benefit whenever you pass away, as long as your premiums are paid.
Permanent life insurance policies tend to have higher premiums than term policies because they do not expire, and the policy may have cash values. Some permanent life insurance products can build tax-sheltered “cash value” within the policy. Cash value is an amount accumulated by investing a portion of your premium payments in funds within the policy. Fund allocations are determined by you or your insurer, depending on the policy type. Permanent plans with cash value are often used as part of an estate planning and wealth preservation strategy.
Whole Life and Universal Life Insurance are types of permanent insurance plans with cash value.
Universal Life offers you a flexible premium option. You may have the option to increase or decrease your premium payment amount or skip premium payments altogether. If there is enough cash value to fund your policy, you may choose to change your payment amounts or your payment schedule.
Although this flexibility can be beneficial, it means the policy must be closely monitored to ensure proper funding. Your policy could lapse if there is not enough cash value to support the policy. Also, there may be a tax liability if the cash value exceeds legislated guidelines. If the maximum amount allowed within a policy is exceeded, the excess amount is moved to an account outside the policy called a side account. When managing a universal life policy, you should consider your objectives for setting it up in the first place, whether that may be for wealth transfer, covering a final tax liability, or leaving a legacy.
Each month, the cost of insurance is deducted from the policy’s cash value — the remaining amount stays in the policy’s investment account. This cash value provides tax-sheltered growth, but its value is not usually guaranteed and can fluctuate along with the market. The policyholder may have the option to borrow against or withdraw the cash value. There are, however, risks to consider, so before making any changes, the policyholder should consult with a life insurance licensed advisor. For example, withdrawing cash value from a policy could result in it lapsing or terminating.
If the policy coverage is terminated or surrendered at the request of the policyholder, the policyholder is paid any cash surrender value, which is calculated as the cash value less any applicable surrender charges.
Whole Life Insurance does not expire, and you are covered for as long as you live if the required premiums are paid. Your premiums are fixed and never change. Your death benefit and cash value are generally guaranteed and do not decrease. As a result, whole life policies require little administration by the policyholder.
A whole life insurance policy can also build cash value. You may be able to withdraw or borrow against this cash value if needed.
A whole life policy can be participating or non-participating. A participating life insurance policy enables the policyholder to benefit from the insurance company’s profits in the form of dividends. Dividends can be used to purchase additional paid-up insurance coverage, build cash value, reduce premiums, deposit to accumulate interest, or be paid out in cash.
Non-participating life insurance does not pay out dividends or bonuses based on the insurance company’s financial performance. Instead, they may award guaranteed amounts that accrue as cash value. Like any investment that gathers regular interest, this can add up over your lifetime.
Whole Life Insurance is often more expensive than other kinds of insurance policies, but for people who value guarantees, need lifetime coverage, or who are purchasing insurance as part of estate planning, it could be appropriate for their needs.
TD 10-Year Term Life Insurance
TD 20-Year Term Life Insurance
TD Term 100 and TD Guaranteed Acceptance Life Insurance are types of permanent life insurance plans that do not have a cash value.
TD Term 100 Lifetime Coverage
TD Guaranteed Acceptance Life Insurance
Which TD Insurance life insurance product should I consider?
How do I get life insurance with TD Insurance?
At TD Insurance, we aim to help you find the right life insurance for your unique circumstances and needs. If you are looking to apply for term life insurance, you could be instantly approved for up to $1,000,000 of coverage if you are 50 and under, with no medical exam required1. Take your first steps:
- Visit TD Insurance online
- Choose the type of term insurance you need
- Get your quote
- When you are ready to apply, answer a few questions online and then continue to apply
- You could also save on your premiums if you apply online, or you are a TD customer or a graduate of an eligible Canadian post-secondary institution or a member of an eligible professional association2 ((click on the link to find the details on the premium discount).
If you want to apply for the TD Guaranteed Acceptance Life Insurance start here with a quote.