Term Life Insurance
Term Life Insurance works just like any other life insurance product except that it only lasts for a specific term period of time. There are different increments of term life insurance to purchase. The most common are 10 year, 20 year, and 30 year life policies. Term policies are designed so that after the term period is up the policy will lapse. However there is an optional rider that can be added to most Term Life Insurance policies. It is called a Return of Premium rider. This does exactly what it says. After the term period is up and granted the insured is still alive, the policy owner if other than the insured will receive every penny they paid into their policy back in the form of one lump some interest free. This way you are putting your money a side every month to insure against the risk of dying within your policies preset term period of time and if that does not happen you get all of your money back. This has become increasingly popular in the past 10 years.
Originally Term Life Insurance was commonly offered in the form of decreasing level term. This was commonly purchased in conjunction with a person’s home mortgage in either 10, 20, or 30 years. The way it worked was that the policy face amount would decrease year by year as the mortgage would be paid down which would decrease the policy premium as well. The reason for this was to cover only the mortgage on your home and as your mortgage decreased so would your life insurance face amount. No longer are decreasing term policies seen or offered. Most people need more than to cover the mortgage on their home. There are many more final expenses a person needs to consider when purchasing a Term Life Insurance policy. It is for this reason that Term policies are now known simply as level term. This is because the premium amount and face amount stay level throughout the entire term of the policy.
One aspect of Term Life Insurance that is very enticing is its cost. Term Life can be very inexpensive and almost always affordable in relation to a person’s budget. It is smart to look into Term Life Insurance as a first time life insurance policy or in conjunction with Universal or Whole Life Insurance policy. Of course just like any of life insurance product the younger a person is the less expensive premium they will have. It is for this reason that Term Life insurance should never be overlooked. Most importantly, most Term Life Insurance policies have built in Convertibility riders. This allows an insured to convert their Term Life Insurance policy to a permanent life insurance policy at any time without needing to take an additional medical exam. There is absolutely no underwriting necessary. This is very smart to take advantage of.For an informative and personalized Term Life Insurance quote fill out the above quote form with your information.
Life Insurance Term
Question & Answers
- Q1: What is the difference between Term Life Insurance and Whole Life Insurance?
A: Term Life Insurance Policies have an expiration date. Common Term polices are for 10, 20, and 30 years. Whole Life Insurance Policies last until age 125.
- Q2: Do Term Life Insurance rates increase at all?
A: No Term Life Insurance rates are fixed for the full length of the term.
- Q3: Can a Term Life Insurance policy be renewed?
A: Only if you purchase a guaranteed renewability rider. Otherwise you will have to re-apply and take a medical exam.