There are really only two types of life insurance; namely, term coverage and whole life. Every plan is some variation of these two types.

Term Insurance generally has no equity or cash value built up in the policy. It is called term insurance because it has an expiry date. This insurance is useful for covering an insurance need that is temporary in nature. This insurance would be good to insure parents who require coverage to replace income if one parent dies while they have dependent children. Mortgage insurance is another example of a need which can be covered by term insurance. Sometimes term insurance can be changed into permanent or whole life coverage.

Whole life insurance is exactly that – insurance which has no expiry date and lasts until needed. Whole life insurance often has an equity or cash value that builds with the policy. Often you don’t have to continue paying for the insurance. After a number of years, the cash and dividends in the policy will be sufficient to cover the premium. Whole life insurance is appropriate for covering needs such as final expenses, income taxes on Registered account balances and income replacement for retirement incomes that reduce at a first death.

It is a good idea to consult with a knowledgeable Certified Financial Planner who has access to a number of insurance companies. You can be sure then that you have selected the most appropriate and best priced product for your needs.