Affordable Life Insurance Protection for Your Family
What is the Meaning of a Term Life Insurance Policy?
A term policy is life insurance that provides temporary coverage for a certain period of time.
How Does Term Life Insurance Work?
Term life insurance, also known as pure life insurance or pure protection, is a type of life insurance that guarantees payment of a stated death benefit if the insured person dies during a specified timeframe, also known as the policy term, which is the duration of time the insurance policy provides life insurance protection.
Pure protection means the term policy provides a death benefit, but no investment feature or cash value inside the policy.
What is the Purpose of a Term Life Policy?
Term insurance is a type of life insurance plan that provides financial protection to the policyholder (Insured Person) for a specific number of years (Policy Term).
In case of death of the insured individual during the policy term, the death benefit is paid out to the beneficiary of the policy by the insurance company. Usually, the death benefit proceeds are paid free from federal income tax.
Are All Term Policies the Same?
When considering the purchase of term coverage, one thing to keep in mind is that not all term life policies are the same.
Some term plans may include certain provisions as standard features, while others may require you to pay extra money to add these features as "Policy Riders" to your life insurance policy.
When comparing term insurance policies, remember that price is not the only factor to consider, also take into consideration the features provided by the policy.
What are Benefits of Term Policies?
Term insurance plans provide financial security to the family of the insured person in case of death of policy holder.
Term Insurance offers:
How Many Term Life Insurance Policies Can You Own?
You can have as several life insurance policies if you want, as long as you qualify financially for the total amount of insurance coverage you own.
Sometimes, it can be more cost effective overall to have a few different Term life policies, especially if you only need a small portion of the coverage for a longer duration, but a larger amount of coverage for a shorter timeframe.
Annual Renewable Term Life Insurance
An ART, or Annual Renewable Term policy is a short-term life insurance policy providing coverage for one year, which can be renewed every year for a defined length of time.
When the term policy is renewed, the premiums increase, rising much more after a period of 20 to 30 years.
Level Term Life Insurance
Level Term is the most popular type of term life policy.
With level term your premiums never increase, and the amount of life insurance protection never decreases throughout the entire duration of your policy term.
Return of Premium Term Life Insurance
This type of temporary life insurance policy guarantees to refund the paid premiums when the policy term ends, assuming that the person insured is alive. These ROP term policies are usually offered for a term of 15, 20 or 30 years. Although these plans cost more than a regular term policy, they are still much less expensive than awhole life insurance policy.
Decreasing Term Life Insurance
Decreasing term insurance is designed to pay out a lower benefit the longer you have the policy. Basically, the death benefit decreases throughout the duration of the plan. While this type of life insurance may seem strange at first, it is meant to provide coverage for people who currently have larger financial responsibilities that will decrease over time as they get older, such as, a home mortgage loan or other large debts.
Modified Term Life Insurance
A modified term life policy refers to life insurance that uses an alternative payment structure to a standard life plan but offers the same type of financial protection. These policies may have premiums that increase over time, at set intervals (5 years) or be structured like a decreasing term policy where the payments decline over time.
Why Buy Term Insurance?
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