Affordable Life Insurance Protection for Your Family

Choosing a Term Life Insurance Policy

If you are shopping for term life insurance coverage, you’ll want to understand how term insurance works, what types of plans you can choose from, and how to select the right policy to meet your specific needs.

 

There are several different features that are important to consider when selecting your term policy:

 

  • Length of Coverage – Choosing the right Policy Term (duration) is one of the most important decisions to make when it comes to buying term insurance. This is the length of time you have the insurance protection. If you outlive the term of your plan, the coverage expires.
  • Premiums – This is the price you pay on a regular basis to the insurance carrier in return for your insurance coverage. Premiums may be paid monthly, quarterly, semi-annual, or annually. You select a premium payment option when you take out your policy.
  • No Cash Value – Term life provides a death benefit only, there is no investment feature, and no cash value inside the policy.
  • Conversion Option – Some term plans offer the option to convert your temporary (term) life policy into a permanent life insurance policy. There is usually a date specified within the term insurance policy that states the time by which you must notify the insurer you wish to convert your coverage to permanent insurance. The premium charged for the permanent policy will be much higher than the term premium you paid, because permanent plans never expire, you have the coverage in force for the remainder of your life, as long as you pay your premiums on time.


 

Add Additional Coverage by Riders

 

Most term life plans offer you the option to add additional coverage to your policy using a "Rider".  


With a rider, you may be able to add life insurance for your children and spouse.


In addition, there may be waiver of premiums available for disability, so in case you are injured, and out of work, your life insurance premiums would be paid by the insurance company.

 

What are the Best Term Life Policies?

 

The most common and most popular type of term life policy is Level Term life insurance.

 

There are several basic Types of Term Life Plans:

 

  • Level Term – This is a temporary policy that offer coverage lasting for a period of 10, 15, 20, 25 or 30 years. Your premiums never increase and the amount of life insurance never decreases throughout the entire term of your policy.
  • Decreasing Term – This is a temporary life insurance plan with premiums that remain the same, while the amount of insurance provided by your policy decreases each year throughout the entire duration of your coverage.
  • Annual Renewable Term – This is a policy that provides life insurance protection for a period of one year. At the end of year, you may choose to renew your policy for an additional year at a higher premium. The premiums increase each year at renewal.
  • Return of Premium Term – This is similar to a level term life policy; however, your premiums are higher, because you will get back all of the premiums you paid for the policy, if you are alive when the coverage expires at the end of your policy term.

 

What is a Term Life Insurance Policy?


Term life is an insurance policy that provides a death benefit to the beneficiary of the policy if the insured person dies within the specified "Term" (duration) of the policy. 


Terms on a term plan usually last for a period of 10, 20 or 30 years.


Choosing the right term insurance policy for your family’s specific needs can be a challenge, and rates can vary quite a bit among insurance carriers. 


That’s why it is so important to work with a life insurance agent or broker who can help you get your questions answered about term life insurance and choose the policy and duration of coverage that meets your specific needs. Request a term life insurance quote.

 

What Does Term Insurance Cover?


Term life policies are is designed to provide death benefits to the named beneficiary(s) of the policy. People typically buy term coverage to replace their own income  for their families, cover cost of monthly living expenses, as well as college tuition for the children, in the event that the passes away during a specified period of time. 


However, some people choose to purchase only enough term coverage to pay for their own end of life expenses, burial and funeral costs.


When you buy a term policy, you select a "Policy Term" which is the period of time you have life insurance protection, such as 10, 15, 20, 25 or 30 years, and an amount of insurance coverage, usually ranging from $50,000 up to as much as $3,000,000 dollars or more, depending on your needs and budget.


The overall expenses you need your term plan to cover should help you determine the right amount of life insurance for you to buy. 


You should take into account your family's anticipated future living expenses:


  • Estimate annual living expenses for the family.
  • Add expected future expenses; for example, replacing the family vehicle in 5-7 years.
  • Add the amount still owed on your home mortgage loan.
  • Add the cost of a college education for your children, in addition to their hobbies/activities, sports and music lessons.
  • Add the cost of your child's future wedding, if you wish to provide for those expenses someday.


After adding all future foreseeable expenses, you can then deduct any assets you have accumulated, such as savings, checking accounts and investments, that may be used to help cover those costs to help you arrive at the right amount of life insurance coverage to provide for your family’s future financial security.


How Does Term Life Insurance Coverage Work?


Once you choose a term policy, you will pay premiums to the insurer to keep your policy "In Force" until the end of the defined "Policy Term", or the end of your life, whichever comes first. 


You may also have the option of paying the premium annually, monthly, quarterly, semi-annually, or as a lump-sum payment at the start of your coverage.


If you pass away during the period of time specified in your  term policy, your designated beneficiary which you select, will receive the death benefit proceeds from your life insurance policy. 


The beneficiary of your insurance policy will choose how to receive the death benefits from the insurance company. 


One option is a lump sum payment, but there are also annuity options, which provide you with a yearly payout, or even a checking account where the beneficiary can write checks from the account and receive an interest rate on the death benefits placed into the account by the insurer. These options may vary by insurance carrier.


Term life is a flexible insurance option that can help you plan for a wide range of future financial needs to be provided for your family. 

 

How Much Does Term Life Insurance Cost?

 

The cost of your term policy will depend on a number of key factors including the underwriting requirements of the insurer.


Your insurance company will assess your health profile and assign you a rating, such as "Standard", "Sub-Standard" or "Preferred".


Some of the factors that affect your life insurance rating and the premium you are charged for your policy may include:

  • Your Age 
  • Your Gender
  • The Current Health and Health History
  • Your Lifestyle
  • Your Family Health History
  • Your Medical Examination and Health Questionnaire 
  • Amount of Insurance Coverage Death Benefits
  • Duration of Your Life Insurance Policy Term


Term Life Policy Cost Example:

 

A 30 year-old female non-smoker would be given a "Preferred" rating and could expect to pay $25 to $35 a month for a 20 year, $500,000 term life policy. By contrast, a 50-year-old male smoker would be given a "Standard" rating and could expect to pay up to $500 or more per month for the same 20-year, $500,000 level term insurance policy.


The cost of your life insurance policy will vary widely – based on your age, health and other personal risk factors. In addition to the varying rates charged by insurer, which is why you’ll want to compare pricing among several of the leading term life insurance companies.


Compare Term Life Insurance Quotes

 

What are the Best Term Life Insurance Companies?

 

There are literally hundreds of insurance companies in the U.S.A. which offer term insurance policies. 

 

Some of the top insurers offering the best policies and pricing may include the following:

  • Transamerica, AIG, Pacific Life, John Hancock, Lincoln National, Prudential, and Nationwide, among others.

 

How to Effectively Select a Term Life Insurance Policy?

 

When you want to buy a term policy, you will need to evaluate your family’s current and future financial needs for the period of time you need protection for them. Also, consider the appropriate duration of coverage – the length of time you want the life insurance to last. 


Term coverage is important if you are the primary income earner for your loved ones and have dependents, or are starting your own family.


There are several important decisions to make when selecting the right life insurance policy:

  • What are your family’s future financial needs in the coming years, and how much life insurance coverage do you need to meet their needs?
  • What term length makes the most sense for your family? Remember, the "Term" of your policy is the length of time your life insurance will provide protection, a death benefit payout upon your death.


What Type of Term Life Insurance Plan Do You Want? 


  • Annual Renewable Term: This means you buy a term policy which is renewed every year up to a specific number of years; however, the price you pay each year will increase at the time of renewal of your policy.
  • Level Term Guaranteed Renewable: This type of life insurance is set for a specific period of time and your premiums are guaranteed to remain the same each year for that entire period of time. In addition, the amount of life insurance provided by your policy never decreases.


The Process of Shopping and Applying for Term Life Insurance


Once you decide how much coverage to buy, and compare pricing by requesting life insurance quotes, you will need to complete an application for coverage. The life insurance company will review the application and may require you to take a health examination, which is paid for by the life insurer.


Once you are approved for coverage, you make your first premium payment to the insurer, and your life insurance policy starts providing coverage.


Term Life Insurance Quotes

 

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Choosing a Term Life Insurance Policy


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