Updated on: May 13, 2024
There are two main types of life insurance: term life insurance and permanent life insurance. Term life insurance offers coverage for a specific amount of time, whereas permanent life insurance offers lifelong coverage that never expires. Here’s a look at how they work:
Within each of these two insurance categories, there are various types of policies. The type of policy you select will depend on your specific needs and goals.
Term life insurance can be a great choice for people who want affordable, short-term coverage. It’s ideal for young families, homeowners with a mortgage and business owners.
As an example, let’s say you bought a 30-year term policy because you wanted your family to have financial protection for a few decades. If you died during this 30-year period, your family would receive a death benefit . They can then use the money from the death benefit for any reason, such as paying off debts, mortgage/rent, the cost of child care, etc.
If you’re alive and well when the 30-year term policy ends, then you can reassess your options. By this time, your mortgage or other debts may be paid off and your kids may be all grown up. So, you may decide you don’t need a life insurance policy. Or, you may still need coverage – in which case, you can renew your policy or convert to a permanent policy.
Sun Life offers term life insurance products with coverage from $50,000 to $25,000,000.
Permanent life insurance is a great choice for people who are looking for lifelong coverage. It’s also helpful for those who want to have cash value within a life insurance policy. Cash value can grow over time and you can always borrow or withdraw money from it. Cash value may be available depending on the type of policy you choose.
Whole life insurance is a standard permanent policy that includes a death benefit for your beneficiaries. Some whole life policies also give you the chance to grow cash value.
Sun Life offers whole life insurance products with coverage up to $25,000,000.
Universal life insurance offers lifelong protection with a range of investment account options. Your beneficiaries will get a death benefit after you die. And, any payments you make above the cost of insurance can potentially grow on a tax-preferred basis. This means that you won’t have to pay taxes on growth within your policy, as long as it doesn’t exceed a certain limit.
Sun Life offers universal life products with coverage up to $25,000,000.
Participating life insurance offers financial protection for your beneficiaries, who’ll get a death benefit after you die. But while you’re alive and well, it also gives you the chance to earn more through potential dividends . You can use those dividends to reduce your premiums or get more coverage. Or, you can choose to receive them as cash.
Sun Life offers participating life insurance products with coverage up to $25,000,000.
Yes, you can. For example, you can get a term policy for your temporary insurance needs like mortgage protection and income replacement while having a permanent policy to cover long-term needs like estate planning and funeral expenses.
If you already have term life insurance and you feel like you’ll need longer lasting coverage, then it may be ideal to convert to permanent insurance.
Permanent policies are more expensive than term policies. Why? Because unlike a term policy, a permanent policy won’t expire. And, depending on the type of policy you choose, your premiums won’t increase as you age.
Connect with an advisor to find out which policy works best for your unique situation.
Need help figuring out what’s right for you? Talk to a Sun Life advisor. Our advisors look carefully at your specific needs to help you figure out what type of insurance is right for you. To find an advisor near you, enter your postal code.
1 Only two of our term life insurance products can be purchased online: Sun Life Go Simplified Term Life Insurance and Sun Life Go Term Life Insurance.
2 Only one of our permanent life insurance products can be purchased online: Sun Life Go Guaranteed Life Insurance.
This article is meant to provide general information only. Sun Life Assurance Company of Canada does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.
