Written by: Yong Chen (Senior Financial Advisor, cell: 4163004768)
To be simple, there are two types of Life Insurance, Term and Whole Life.
Term life is very easy to understand, it means the insurance lasts a certain number of years and then stops when the term ends. Usually there are 5\\10\\20\\30 years term life policy, you can choose any one depending on your demand. Actually, you can stop the policy anytime if you don’t want it.
There are a few types of whole life, including UL\\participating whole life\\permanent life.
Many people think UL is one type of life insurance different from Term and Whole Life. However, it is really not an independent type of life insurance but one of types of whole life.
What is the difference between those three types of whole life?
UL, universal life is a very flexible and multifunctional whole life. You can choose it to insure one person, two persons, three persons, even more to 20 persons in one policy (you would save policy fee). You also can choose an investment portfolio to build into an UL policy to create cash value as well make your insurance amount (death benefit) increasing by the investment return earned and the balance of portfolio increased. You have right to choose different premium payment period such as 10\\15\\20 or lifetime, as well monthly or annually payment.
Permanent Life is a new type of whole life provided by Sunlife. It is a solid amount death benefit (since you apply for it to you pass away) and solid premium for every year (10\\20\\lifetime). It is a simplest whole life.
Participating whole life is a much complex whole life insurance. It is a life insurance with participating into divident allocation of premium investment pool. Due to the comparison of much higher premium than other types of insurance, it is suitable to those people with high income or high assets, as well young ages persons, such as business person, self-employees, high level skills or management, sport stars, singers, actors or actresses, artists or other performance stars, etc..
It is a very good fortune creating tool, as well the functions of risk control and fortune protection, fortune inherited with no tax, so it also is a very important tax-saving tool for wealthy class.
In addition, I like to mention that a lot of people ask me for mortgage insurance that would protect mortgagee from any lost due to the death of mortgage loan borrower before mortgage paid off. Actually, I have to say, so-called mortgage insurance is a type of term insurance, mostly YRT(yearly renewal term) insurance. The insured (mortgage borrower) possibly pays same premium every year but the death benefit of the policy decreases as the mortgage amount lowering in the same period. It means your premium increasing every year by your age, so it is called yearly renewed term.
For participating whole life, someone called it as retirement insurance or saving insurance or others name. I have to say it is just a marketing speech not a real name for an insurance or a new type of life insurance. So please totally understand what you want to buy and what you have bought, it is very important.
This article is intended only for the purpose of informational reference which is completely personal opinions of the author himself, neither constitutes specific sales proposals or insurance advice, nor expressly proposes or implies the purchase, or endorsement of any specific any financial products. Prior to any financial planning, please consult a professional and qualified Financial Advisor, or contact the author himself for a personal discussion. All contents are intended only for the reading by residents and citizens of Ontario Canada. My cell: 4163004768.