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Why Buy “Term” Insurance?

I have been in the insurance business for over 30 years and a question that continues to arise is, “What is the best type of insurance to own?” Is it term insurance or whole life insurance?

Experience tells me that the best insurance to own is the type of insurance that is in force when you die!

I have never had a family approach me after a loved one or business partner’s death to ask the question, “What kind of insurance did they own?”

Rather the question is, “Were the premiums paid up to date?”, or “How much is the death benefit?”

Yes, there are several different types of polices and yes each type of policy can be vastly different than one another. Is a policy permanent? Will it cover a short term problem? Are premiums guaranteed? Is there a cash value? And, are there tax consequences?

These are all fundamental differences.

Never overlook the most basic premise. If you died tonight, will the death benefit in your policy do what you want it to do? A $100,000 death benefit is 1/10th of a $1,000,000 death benefit. If the need is $1,000,000 then a $100,000 policy will simply will not cut it; regardless of whether it was term insurance or whole life insurance.

So, here is a thought; solve the problem first. Start with an amount of term insurance that solves your problem. As one client told me, “let’s stop the bleeding first”. Then convert the term insurance into permanent insurance based on its own merit, and based on your needs, affordability and financial plan requirements.

If you are in Nova Scotia and would like some insurance advice, please contact Corry Collins:
corry@maritimewealth.com
902-444-7000


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