Term vs. whole life insurance in Alberta - Compare the differences

When deciding between term vs. whole life insurance, it's important to understand the differences, as well as the advantages and disadvantages of each. Only then can you make an informed decision about whether term insurance or whole life insurance will help you achieve your short term and long term goals.

What is whole life insurance?

Whole life insurance provides insurance coverage for an individual's lifetime. With the submission of timely fixed premiums, whole life insurance is a permanent policy that doesn't expire. While both offer a tax-free death benefit, another major difference between term vs. whole life insurance is that a whole life plan carries cash value. The life insurance company invests a portion of the premiums and offers an attractive savings component that has a guaranteed rate of return.

Since whole life insurance tends to be more expensive than term insurance, however, it may not always be the appropriate choice. For recent graduates or young families in Alberta and B.C., term insurance may be a practical alternative.

What is term insurance?

Unlike whole life insurance, term insurance offers short term protection. Generally, it's used to cover a specific debt or period of time. Less expensive than whole life insurance, term insurance doesn't offer the same permanent coverage or the cash value benefit.

Life insurance - Compare the differences with a life insurance broker

The question of term vs. whole life insurance is a matter of both choice and circumstance. Our HDF Insurance brokers would be happy to provide more information about the various types of life insurance, compare policies for you and design the best plan for your needs. Contact us today!