MTHEL131 Lecture Notes - Lecture 4: York Region Transit, Whole Life Insurance, Tax Shelter
8 Feb 2016
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Desire to pay off in full at death. Home ownership: mortgage payment is fixed and level (whereas rent goes up every year, you build up equity, keep equity! Say the price of the home goes up after. Of the two most common types of life insurance, one is like renting and one is like owning (term and whole life insurance) Whole life insurance has csv (cash surrender value): money you get when you cancel your policy. Two properties of term insurance: term insurance is automatically renewable, term insurance is also convertible (usually last year to convert is around 65-70) Can convert it to a whole life policy without any medical evidence: not all term insurance is renewable and/or convertible! Examples: has an expiry date = term insurance, has a chart of csv = whole life policy. You can cancel at any time but eventually expires. Doesn"t expire and there"s a cash surrender value when you cancel.
