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Term Life Insurance

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Term Life Insurance

Term Life Insurance

Insurance is important to have and life insurance will help to keep your family protected and financially secure in the event that you pass away. There are many options when it comes to life insurance options and term life insurance is one of them.

What is Term Life Insurance?

Term life insurance is an insurance policy that has a set amount of time on it. This amount of time is determined by you and can be in increments of 5 years, 10 years, 20 years, and so on. While the policy is active, you are considered covered. Once the policy has expired, you can either choose to renew the policy or you can just let the coverage end.

This type of coverage is perfect for someone who needs short term protection and wants a low cost. Term life insurance is perfect for someone who needs coverage now and does not have health insurance. You usually do not need to provide any type of record of health to receive this type of life insurance.

What Happens after the Policy Expires?

When the policy is reaching an expiry date, covered participants are able to choose to renew the policy or they can let the policy expire. Once the policy expires, the covered party will no longer have any type of life insurance. If the covered party chooses to renew the policy, they will have the option of choosing another amount of time and their rate may fluctuate.

Term Life Coverage Plan

In general, term life insurance policies are the same and do not fluctuate much in what they cover. The benefits are paid to the designated beneficiary when the covered party passes away. If the covered party is not covered upon death, no benefits will be paid out.
Typical term life insurance policies offer things such as:

  • No proof of medical records when renewing
  • You can benefit from living a healthy life through discounts offered to those in good health
  • Guaranteed premium rates at renewal
  • Lower costs
  • Guaranteed coverage for the length of your policy
  • Ability to change to a permanent policy

There are two types of coverage plans under term life insurance. The first plan is an annual renewable plan and this plan is effective for one year and you must renew it every single year. The rate of your policy will increase every year as you age. This is a good option for someone who does not want to be locked in to any specific plan for a lengthy amount of time. The second type is a level premium term. This type of plan will lock you into a plan for a set amount of years at a set price. This is the way to go if you want to lock in a low rate.

Premiums

The premium that you will pay on your term life insurance policy will be substantially lower than that of a permanent life insurance policy. The price difference is one of the reasons that people choose to go with term life insurance.

The reason that term life insurance does not cost as much as permanent life insurance is because it is less likely that you will need a payout while you have this policy in place. Many young adults choose to go with this type of a plan because it offers them exactly what they need.
Your premium will fluctuate depending on a couple different factors. These factors include things like your age, how much of a payout you want, and also how old you are. The older you are, the worse your health is, and the larger the payout, you will notice that your premiums are much higher.

You should always speak with a life insurance broker when you are thinking about purchasing life insurance. They will be able to help guide you and let you know what is available to you. Choosing the amount of coverage you need is also very important and you will want to figure out the amount of income you want your spouse to have should you pass away. This will help you decide how much you need to purchase. Term life insurance is a great and affordable way to get life insurance and will help keep your family covered should something happen to you.


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