For providing pure life insurance protection the most popular plan is Renewable and Convertible Term Insurance. This is the most basic form of insurance and is the simplest to understand. Coverage is provided for a specified term, the policy renews automatically at the end each term period until the policy expires, most commonly at age 85. This plan has the lowest initial cost at entry, but don’t be mesmerized by the low cost because on renewal you will pay a substantial increase. If, however, you become uninsurable before the end of the term period you will have no other option but to renew if you want to keep the coverage.
Most companies offer a 10 year and 20 year renewable term policy and, recently, some have started to provide a 15 year and 30 year term. So how do you decide which one is right for you? For starters, match your insurance needs with the length of time required that they be insured. For example, if you have a young family you probably would wish to cover the acute dependency period until the children are out of school (including post secondary) as a minimum. Read more