Term Insurance Rates

When you decide to invest in life insurance you need to compare rates for your individual needs from various companies.

Premiums on permanent life insurance policies are guaranteed never to increase beyond the rates outlined in the policy, even though the cost to the insurance company for providing the coverage will not be known for many years. Due to this uncertainty, premiums must be set at a conservative or higher level which ensures the company's ability to pay the benefits, regardless of the future considerations.

Term Life Insurance Is Different

However for term life insurance, this is not the case as usually the periods of coverage are for a fixed period of years, for example 10 years. If you take such a policy, you would then need to renew it at a higher premium. And you need to remember you may have to undergo a medical exam at that time as the company regards this as a new term life policy.

But the good news is that in Canada, you can buy a "Term 100 year" policy which takes you up to that age at a fixed premium. It's more expensive than a "Term life 10 year" or a "Term life 20 year" policy but except for older ages, it it still less expensive than whole life insurance.

The Cost Of A Term Life Insurance Or Whole Life Policy Is Determined By Three Basic Factors:

Mortality. The life insurance company initially assumes a certain projected rate of mortality for the lives of those insured. This rate varies with age, product, sex, health and number of years from the issue.

Expenses. The insurance company projects future operating expenses, such as policy acquisition costs, company operating expenses, and other costs of doing business.