3 min read
At a glance
- Term life insurance provides coverage for a fixed period and is ideal for people looking for temporary coverage.
- Whole life insurance provides lifetime coverage and ensures consistent premiums with access to additional funds.
- Canada Protection Plan offers term life and whole life solutions to meet as many people’s life insurance needs as possible.
When it comes to life insurance, you have two main options: term life and whole life. Understanding the differences can help you decide which is better for you. Below , we explore the coverage differences1 to help you learn what term life and whole life insurance mean so you can decide which product will help you and your family.
Term life insurance
Term life2 is a great choice if you don’t need (or want) to commit to a permanent or whole life product. It offers flexibility because you can choose the length of coverage. Term life products are available as Term 10, Term 20 or Term 30, signifying the number of years each policy covers. At the end of the term, you can choose to renew or end the policy.
Term life insurance is popular among young or growing families, but it can also be useful for older adults or seniors who need additional coverage. Some adults will take out term life insurance until their mortgage is paid off or to help cover their parents’ retirement home fees should they die prematurely.
One potential big benefit of term life insurance is that you may have the option the convert it to whole life at the end of your term.
Whole life insurance
Whole life insurance3 is a popular choice if you want a long-term life insurance solution. The monthly premium payments are typically higher, but you also have the peace of mind that you will pay the same amount for the entire policy length. This is unlike term insurance, where your premiums could increase if you renew or convert when your policy ends.
A whole life policy also typically comes with a tax-deferred savings component. Since it can accumulate cash value, you can borrow against your death benefit to use in financial emergencies. This is an attractive advantage for anyone who wants to leverage this amount for loans.
Which type of insurance is better for you?
In a nutshell, it depends.
Term life insurance and whole life both have many benefits4 that can protect your loved ones. A term life product could be right for you if:
- You do not need long term coverage.
- You are looking for a relatively inexpensive insurance solution.
- You have a growing family who may not need your whole life coverage forever.
On the other hand, whole life could be beneficial if:
- You want assurances you’ll pay the same premium amount for the duration of the policy.
- You want the peace of mind of the guaranteed payout.
- You are interested in accumulating cash value.
When choosing a life insurance product, it’s always worth thinking about the policy benefits among other key factors that can influence your decision to help you find the best insurance coverage for you and your family.
Canada Protection Plan life insurance options: What’s next?
Whether you like the flexibility of term life or prefer to long-term security of whole life coverage, Canada Protection Plan, a Foresters Financial™ company can help. Here’s what you can do next.
- Get a no obligation quote today.
- Ask your advisor how term life or whole life insurance could benefit you.
- Select a life insurance product and tailor it to suit your needs.
- Get peace of mind and financial security for your family.
1 https://www.investopedia.com/term-life-vs-whole-life-5075430 (2024)
2 https://www.investopedia.com/terms/t/termlife.asp (2024)
3 https://www.investopedia.com/whole-life-insurance-pros-and-cons-5079309 (2022)
4 https://www.nerdwallet.com/article/insurance/term-vs-whole-life-insurance (2024)
Footnotes
Foresters Financial and Foresters are trade names and trademarks of The Independent Order of Foresters (a fraternal benefit society, 789 Don Mills Road, Toronto, Ontario Canada M3C 1T9) and its subsidiaries.
Foresters and Canada Protection Plan (CPP), and their employees and life insurance representatives, do not provide, on Foresters behalf, financial, estate, legal or tax advice.
424169 CAN (11/24)
