The question of whether to buy term or permanent insurance is not an easy one and should be considered in light of the benefits that each policy carries.

The single greatest benefit of a Term life insurance policy is cost. As an example, a 40-year-old male non-smoker will pay $37.58 a year for $250,000 of term-20 coverage with Canada Life. That same individual will pay $214.20 a month for $250,000 of 20-pay whole life coverage with Empire Life. For this reason, term insurance is most beneficial for those seeking to cover a specific temporary need, like a mortgage, line of credit or business loan, in the least expensive manner.

The greatest benefit of permanent insurance (either whole life or universal life) is the “paid up” feature, which sees all premiums returned to the applicant at the end of the coverage period. This can be helpful to those who view their insurance policies both in investment terms and as a source of relief in case of accident or death. The increased monthly cost of such coverage can also be counted upon as a source of funds in an emergency. Just remember that such withdrawals are often accompanied by penalties.

The applicant in search of an appropriate insurance solution would do well to consider the benefits listed above in light of his current salary, his need to access paid premiums either at the conclusion or during the life of the policy, and his particular short- and long-term insurance and financial goals.

For those still having difficulty deciding, a chat with an insurance agent about the possibility of combing both term and permanent insurance might provide the most appropriate solution for those with very specific or more complex needs.