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Comparing types of life insurance

​Get the type of insurance that best meets your needs. The table below summarizes the types of insurance available and how each is most commonly used.

Type of life
insurance policy

Premiums and
coverage time

How this insurance
might be used
​Term

​Insurance coverage guaranteed for a pre-defined term, typically 5, 10 or 20 years

Premiums stay the same for length of the term

Renewal of term is guaranteed, but at a higher premium rate

Coverage ends at a specified age (often age 75 to 85)

Lowest cost form of insurance

​Often used during working years to provide the capital needed to replace income when a key breadwinner dies

Coverage is not guaranteed for life, so may not be appropriate for estate planning goals

​Term to 100

​Permanent insurance guaranteed for life

Premiums stay the same until age 100, or may in some cases be payable over 20 years

Typically has no savings component or cash value

Lowest cost form of permanent insurance

​Pre-retirement – can be used to replace income if you were to die unexpectedly

Retirement – can be used to cover your estate’s tax liability or add to your estate’s value

​Universal life

​Permanent insurance guaranteed for life

Premiums are adjustable depending on savings and insurance needs

Policy provides both insurance protection and tax-sheltered savings

​Retirement – savings can be used to cover ongoing premiums, increase the policy’s death benefit or used as loan collateral to provide money in retirement

Estate – can be used to cover your estate’s tax liability or add to your estate’s value

Whole life

​Permanent insurance guaranteed for life

Premiums stay the same for life

Policy has a cash value that you can borrow against, or cash out if you terminate the policy

​Retirement – savings can be used as loan collateral to provide money in retirement, or withdrawn if you end the policy

Estate – can be used to cover your estate’s tax liability or enhance your estate’s value

Learn more about your life insurance options.
 

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