Affordable Life Insurance Protection for Your Family
If you are in the market for life insurance to protect the future for the ones you love, you may be considering term life.
Term insurance is the most popular type of life insurance purchased by people on a budget looking to get the best deal and the most coverage for their money.
With term life, you can provide your family with the financial security they need for their future, in case you die unexpectedly.
With term insurance, you select the amount of coverage you need and how long you need your family’s protection to last, up to thirty years.
How Term Life Insurance Works
Term life insurance provides you with temporary life insurance for a specific number of years. You can choose coverage for a "term" of 10, 15, 20 or 30 years.
Term life builds no cash value inside the policy, it is not an investment, it is "pure protection". That’s why it usually costs 2 to 3 times less than permanent life insurance.
Term life is the lowest cost type of life insurance.
Term life insurance lasts for a set period of time up to 30 years.
Term life policies pay the beneficiary the face amount of the term life policy if the insured person dies during the term of the policy.
For example, a 10-year term life policy with a face amount of $250,000 would pay $250,000 to your beneficiary if you die any time during those 10 years.
If you're alive at the end of the policy term, the coverage ends.
Features of Term Life Insurance
The annual insurance premium for your life insurance policy stays the same each year. The face amount of life insurance coverage also stays the same. Level term life insurance policies can last up to 30 years.
Before the end of the term for your policy, the life insurance policy owner (you) may be able to convert the term life insurance policy into a permanent life insurance policy. The owner usually has a specific number of years during the term life insurance policy to convert the policy. Your life insurance premiums will be higher for the permanent life insurance.
Term life insurance policies that are renewable offer the owner of the policy the option of renewing the life insurance policy at the end of the term, up to a specific age limit (usually age 65 or 70).
For example, a 15 year policy may be renewed for another 15 years when the first policy ends. If the policy is renewed, a medical exam may or may not be required. The term life insurance premium will usually increase when the policy is renewed.
Benefits of Term Insurance
How Life Insurance Can Benefit Your Family
Life insurance policies can provide your family and loved ones with financial security after a parent, spouse or income-earner passes away. Two of the major ways life insurance provides protection for your family is by providing for two of your biggest expenses:
Providing for your family’s mortgage and your child’s education may be the largest expenses you have as a family. It’s important to consider these expenses when deciding on the right amount of life insurance protection.
If you currently have these financial commitments, it would be wise to own a life insurance policy.
Using Your Life Insurance Policy to Settle Your Estate
You have the option of designating your life insurance death benefit proceeds to pay for your estate settlement. There may be estate taxes owed when settling your estate. Instead of your family selling their home to pay for estate taxes owed, you may want to use your life insurance policy to pay estate taxes.
You also have the choice of making a charitable organization the beneficiary of your life insurance policy. If you pass away, the proceeds of your life insurance policy would be paid to the charitable organization.
Business as Beneficiary
If you own a business, you could choose to name the business as the beneficiary of your life insurance proceeds. The business could use the money from your policy to pay off loans, debts, or it could be invested by the business.
Advantages of Term Life Insurance
Disadvantages of Term Life Insurance
Reasons to Buy Term Life Insurance
Although the reasons noted indicate a situation better suited for a permanent life insurance policy, there are several advantages of term life protection for your family, including:
With level term insurance, you pay the same amount of money (premium) for your life insurance coverage each year for the period of time you have coverage (term). In addition, the amount of life insurance provided by your term policy remains the same for the entire duration of your policy.
The Most Common Reasons for Not Purchasing
a Term Life Insurance Policy
Who Purchases Term Insurance?
Here are some examples of people who may buy term life insurance:
Why Purchase a Term Life Insurance Policy?
How Much Does Term Life Insurance Cost?
The cost of a term life plan can vary based on several different factors.
For instance, the amount of life insurance will affect your premium, as well as, the length of time you have term life protection - 10, 15, 20 or 30 years.
In addition, rates will vary by insurer based on each insurer's pricing guidelines and their loss experience for certain types of risk, such as, senior citizens or people with diabetes, or smokers.
How Can You Find Out How Much Your Term Insurance Plan Will Cost?
You can contact a local life insurance agent or you can compare free, instant term life rate quote comparisons online from several leading insurance companies.
What Factors Determine the Cost of Term Life Insurance?
There are several factors that may affect your rate for term life insurance, including but not limited to:
How Much Life Insurance Coverage Do I Need?
One way to decide how much term life insurance you should buy is to consider the needs of your family if you were to pass away prematurely.
Term Life insurance may provide financial security to meet many of your family’s needs by providing a fund they can use to:
Use a life insurance needs calculator to help you determine the right amount of life insurance protection for your situation.
How Long Does Term Insurance Last?
Term life insurance by definition is "temporary" insurance for a certain number of years.
The term of the policy is the duration, how long your coverage will last.
You select a term when comparing price quotes so you can find out how much your term insurance will cost for the specific duration of your policy.
Term Options for Life Insurance
Terms Duration Options: 10, 15, 20, 25 or 30 years.
Most term life plans offer coverage for a period from ten up to thirty years.
However, you may be able to select a duration of coverage for 10, 15, 20, 25 or 30 years.
How Long Do I Need Term Insurance to Last?
Term insurance can last as long you need protection, usually up to a period of thirty years. You’ll want to select a term period that is in line with your actual need for protection.
So, consider what goal you want your term policy to accomplish, providing protection for your mortgage, child’s education, family’s living expenses, etc.
Then consider the length of time you need life insurance to accomplish each of your goals.
What is the longest period of time insurance is needed?
Once you know this answer you can select coverage for that "term" (length of time).
Or, you could have separate term life insurance policies with the specific amount of coverage needed and duration of coverage for each of your family’s needs. That way, you get the overall lowest cost of coverage that is designed for your specific needs.
Do I Have to Take a Medical Examination?
There are traditional term life insurance policies available which do require the applicant for coverage to submit to a medical examination.
However, some insurers offer no medical exam term life policies for healthy individuals between the ages of 20 to 60.
How Long Does It Take to Get Insured?
It depends on the type of term life policy you want to purchase.
Traditional term plans require an underwriting process including a medical exam, and may take up to 3-4 weeks for approval and your policy to be issued.
Whereas, quick issue term life policies offer you the option to apply for your policy online and start your life insurance coverage today, if you qualify.
Can I Apply Online for Term Life?
Yes, there are insurers that offer you the option to apply online (safe and secure) for your term insurance coverage. It usually takes about 15 to 20 minutes to apply over the internet.
How Can I Save Money on Term Life Insurance?
Tips for Comparing Term Life Quotes:
Term Life Insurance Quotes
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