Finding the proper permanent coverage for you, whether it is whole life insurance, or universal life insurance, will take some professional advice. Our Grimsby Hometown team has helped our clients identify the coverage that will ensure their family is protected when they need it most. The relationship with our clients goes well beyond the initial setup of the policy, it is equally important to ensure that the coverage continues to provide the required protection. And when it comes time to make a claim, we will be there to assist your beneficiaries too. You can find more general information about whole life insurance, and universal life insurance on our website, or connect with our Hometown representatives in Grimsby. We are here to help you!
The most common coverage for young families is term life insurance. It provides higher levels of coverage, at a lower premium. This is really important when your family is young as you may have a mortgage, a need to replace income for your family and other responsibilities. Since these needs are temporary, term life insurance will balance the insurance need with your budget. However, there are insurance needs that will extend for a longer period of time that may require a permanent life insurance policy. Understanding your insurance need is an important first step, and our Grimsby Hometown Life Insurance team has the knowledge and experience to help you evaluate your coverage options.
When you purchase permanent life insurance, your premiums are locked in at the time of application. You also will select the payment period that you prefer. The first payment option is a lifetime pay policy where your premiums would be paid for the entirety of the policy at the same rate. The second option is a “limited pay” policy where you select a shorter term (say 10, 15, 20 years) and you would pay premiums for that amount of time. At the conclusion of the term, your policy is considered to be “paid up” and would stay active without any further premium payments. The lifetime payment option has a longer payment period, but the monthly premiums are lower as a result, compared to a limited pay policy. Either way, your premiums are locked in and will never increase for permanent insurance.
The premiums on your life insurance policy are calculated based on coverage amount, age, gender, smoking status, medical history, lifestyle, occupation, and family history. Your life insurance application will provide this information to the underwriters so they can evaluate your risk and get you the best possible price for your coverage.
The simple answer is yes, permanent life insurance can be cancelled. However, there are some things you will want to consider before cancelling a permanent life insurance policy. If you ever require coverage in the future, you will have to go through the entire application process again. Your premiums will also increase, as you are now older and potentially have had changes in your health that could increase your cost as well. Within permanent insurance policies, it is also common for there to be a cash component that would be paid out if you cancel. It is important to know that the cash payment out of a life insurance policy comes with tax implications. Take some time to speak with our Grimsby Hometown team first, to better understand your options. The cash value may instead be used to pay your premiums, take a partial withdrawal while keeping the policy in force, or as the source of a loan against your policy if you are looking for some funds.
Your life insurance application is the first step in the underwriting process. It is used to gather basic personal information, health, medical, occupational, and lifestyle details to asses your risk. After reviewing the application and the results of any required tests, the underwriter will determine if any other information is required to make the decision. Depending on your health, you may receive a “standard” rating, which is most common. This means that the rate will match what you were quoted. Or, you may have a rating due to indications that you are higher risk. Once approved, you will have the final decision of whether you would like to put the policy into force and begin paying your premiums.