There are numerous companies in existence today that offer life insurance policies. Although the crux of the policy (ensuring safe and sound life of an individual’s survivors as well as the individual) is not altered, companies try to differentiate themselves from each other by making different classifications or bifurcations.

Generally speaking, life insurance is divided into two parts.

1. Term Life Insurance Policy – ​​Anyone can opt for term life insurance. This type of policy is basically intended to cover the short-term needs of a person. For example, if the policy holder unfortunately suffers a serious accident, he can claim the insurance amount. But it also compensates the mourners in the event of the death of a family member. All in all, it is a policy that helps cover the potential need for short-term life insurance.

Term life insurance is usually a renewable and convertible program. It goes from one to a hundred years. If it is a one-year program, the cost of your coverage increases after each year until it expires. Usually, the maturity is at the age of 75 years. Whereas if the policy is term at age 100 along with the cash value, it later becomes part of ‘whole life’ insurance. It is often found that it is cheaper to purchase a whole life insurance policy than a non-cash value 100 Term policy.

2. Permanent Life Insurance: This is life insurance for the entire life of the individual. The value of this policy increases over the time that you participate in the program. Terms like Par and Non-Par are widely used in this context. Whole life coverage pays dividends that are a partial return of the premium paid for the coverage and investment growth. The amount of dividends keeps changing annually. On the other hand, non-par whole life insurance policies do not offer dividends. Future cash values ​​in these cases are not projected but insured or guaranteed.

o In addition to these whole life quick pay premium policies are also available. In these there is a fixed premium that one has to pay for leaving a short interval of time until the time when it is paid in full. The death benefit on this policy is leveled and paid at the time the premium ceases.

o The whole life insurance policy can also be divided in terms of premium payable by 15 years, 20 years and 65 years of age. The terms and conditions in these cases remain more or less the same.

o The Universal Life insurance policy is intended for people who require life insurance, have a large marginal tax bracket, have large RRSP and pension contributions, pay good tax on investment income, want additional future income and have an investment perspective for at least 10 years. These policies are considered the most difficult of all insurance contracts.