Possible Eventual Outcomes for Term Life Insurance Policy Owners

If you are already an owner of a Manulife Engineers Canada Term Life policy, (or if you are considering becoming one), one of several eventualities will occur.

1. You decide that you no longer want or need the coverage

This may happen when the temporary needs that were the original impetus to buy the coverage in the first place no longer exist, and you feel that the insurance is no longer necessary to continue.

If this is the case for you, you should at least be aware that depending on your health your policy may not be replaceable, and that there may be charities that are interested in continuing your policy even if you are not. An authorized advisor can help you ascertain if this is an option available to you.

2. The escalating premiums drive you out of the policy for cost and/or benefit reasons

All Term Life insurance policies follow an escalating premium schedule – meaning that the premium will increase at regular intervals every 5, 10, 20, or 30 years – depending on the term length of the policy.

In the case of the Manulife Engineers Canada Term Life plan, the premiums follow a schedule whereby the premiums escalate every 5-years.

At some point this either becomes unaffordable for most people to continue, or they may decide that the ongoing cost outweighs the potential benefit.

For these reasons it is important to review your policy with your advisor occasionally such that you know in advance if/when a premium escalation is likely to occur, and you still have the maximum potential options available to you, should you need or want some (or all) of the coverage

3. You claim on your policy

In the event that you were to pass-away prematurely (i.e. prior to it the policy expiring), you would claim on your Term Life insurance policy, and the benefit would be paid to your chosen beneficiary(s).

4. The policy will expire prior to your statistical life expectancy

Upon attaining either age 85, (or age 75 – subject to the plan version that you have), the policy will automatically terminate, and will no longer offer insurance protection.

This will occur regardless of whether you still have ongoing insurance needs.

5. You exercise your conversion privilege

As discussed previously in this article, you have the option to convert some (or all) of your Term Life insurance to Permanent Life insurance. This must be done either prior to age 65 (to have the maximum possible options open to you), or prior to age 75 when the Conversion Privilege expires altogether.