How Many Years Does Term Life Insurance Have?
If you are considering the purchase of term insurance, you may be wondering how long term life insurance policies last?
First of all, since term insurance is temporary, it lasts for a specified number of years.
The most common length of coverage, also known as the "Term" or "Duration" are 10 or 20 years.
However, you may be able to choose term life coverage lasting for a term of 10, 15, 20, 25 or 30 years.
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How Does a Term Life Insurance Policy Work?
Since term life is temporary insurance it provides life insurance for the short-term, between 1 to 30 years.
If the insured person dies during the policy term, the death benefit is paid out to the beneficiary of the policy. The proceeds from the life insurance plan are usually paid free from federal income tax.
The beneficiary or beneficiaries are chosen by the owner of the life insurance policy.
If the insured person is alive when the term life policy expires, there is no payout of any benefits, and the insurance coverage ends.
Term life is death benefit only life insurance, it does not build up any cash value inside the policy, such as, permanent life insurance, which costs up to 5-10 times more for the same amount of life insurance compared to term life.
Who Needs Term Insurance?
Since term life is temporary, lasting up to thirty years, it is designed for anyone who need protection for a period of 30 years or less.
Common Reasons to Buy Term Insurance:
- Cost – It Is Cheap. It allows you to buy the maximum amount of life insurance protection at the lowest cost.
- Tax-Free Death Benefit – Proceeds paid from the death benefit of a term policy are free from federal income tax.
- Living Benefits – Some term insurance policies include living benefits, which means you may access a portion of your policy death benefits while you are still alive.
- Renewability – Term plans offer the option to renew your policy when your initial life insurance term ends.
- Convertibility – Term policies offer the option to convert your temporary plan into a permanent life insurance policy.
- Pay off a Mortgage
- Provide Financial Independence – Purchasing a term life insurance policy each time a child is born and naming the child or the person who will be their guardian as the owner will allow you to give some financial security to all of your descendants, just in case you are not able to be there to help them yourself.
- Pay for College Education
- Pay Off Credit Cards and Other Debts
- Pay for Your Final Expenses
What are The Advantages of Term Life?
Life insurance providing temporary coverage offers several advantages:
- Premiums are usually much lower for Term life insurance compared to whole life insurance.
- Term life provides funds for people who depend on you for financial support.
- Creates an estate to leave to your heirs, if you haven’t had a chance to build much wealth.
- Level term life insurance premiums remain the same for the term of the policy. So, 20 year level term means your premiums stay the same for 20 years.
- Provides the maximum life insurance protection for your dependents at the lowest cost.
- Provides affordable life insurance protection to fit almost any budget.
- Many term life policies offer you the option to convert your coverage to whole life insurance by some future date, (without having to prove insurability – taking a medical exam).
How Can I Save Money on Term Insurance?
There are several tips you can use to help you get more affordable life insurance premiums:
- Compare Rates – You may save up to 50% or more on your premiums by comparing prices among several insurers.
- Choose Term over Permanent – Permanent life insurance costs up to 5-10 times more than term insurance policies.
- Annual Premium Payments – Insurers charge an additional processing fee for monthly or quarterly premium payments. Paying premiums once (annually) per year will save you money.
- Get Healthy – Improve your overall health by eating right, exercising and lowering your cholesterol to qualify for a better rate on life insurance.
- Quit Smoking – Smokers pay up to 5-10 times more than non-smokers for the same amount of life insurance protection.
- Lose Weight – People who are obese or overweight pay a higher premium because of the greater risk of developing health problems which could shorten your life expectancy.
- Avoid High Risk Hobbies – People who take part in high risk hobbies; such as, B.A.S.E. Jumping, mountain climbing, racer driving or skydiving pay a higher rate for life insurance.
Tips for Comparing Price Quotes on Term Insurance
- Compare Rates from several life insurance companies, because pricing does vary by insurer.
- Compare Pricing for 10, 15, 20 and 30 years of term life coverage.
- Review the Financial Strength Ratings of the insurance companies.
- Don’t Buy More life insurance than you Need.
- Buy life insurance while you are Young and Healthy, as rates increase with age.
- Comparing different Limits of Coverage, as you may find it's not that much more expensive to buy a higher amount of life insurance; for instance, $300,000 instead of $250,000.
How Much Does Term Life Insurance Cost?
You can find out how much coverage for term life costs by requesting and comparing free term life insurance premium quotes online.
All you have to do is visit a life insurance website, fill out the Quote Request Form, and instantly see the lowest prices on your screen
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How Many Years Does Term Life Insurance Have?
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