Term Insurance - An Overview
What is Term Life Insurance?
Term life insurance is generally the least expensive and least complicated type of life insurance. It provides insurance protection for a specified period of time, such as 10, 20 or 30 years.1 If you die within the term period and the policy is in force, a death benefit is paid to your beneficiary. If you are still living at the end of the term, protection ceases unless your term life insurance policy is renewed. There is no “accumulation” element, or cash value with term life insurance.
Who’s it for?
People with a temporary need for life insurance protection.
Those who need a large amount of insurance protection but have limited budgets.
People with specific business needs (e.g., business owners who want to cover the life of a key employee who has a set number of years until retirement).
Benefits of Term Life Insurance:
It provides insurance protection for a low cost (at least initially).
If your needs change, most term life insurance policies allow you to convert to a permanent life insurance policy without having to take a medical exam or provide other information about your health.
Term life insurance is a good way to supplement other coverage when you have added financial responsibilities for a given period of time (e.g., mortgage, college expenses).
Death benefits are generally received free from income tax.
Things You Should Consider:
Premiums generally increase with age and they could become unaffordable later in life. There is no cash-value element with term life insurance, so you miss the tax-deferred growth of the cash value of permanent life insurance policies, such as Whole Life Insurance.
Once the term period expires, unless you renew your policy, the insurance coverage ceases and the policy has no further value.
Level Term Insurance
Level Term Insurance1 provides life insurance protection that remains level for the amount of time you select; either 10, 15, 20, or 30 years. Once the term period is selected, it cannot be changed.
Fully guaranteed with level premium payments and term periods of 10, 15, 20, or 30 years.
If you still need protection after your term period is over, you may renew your coverage each year up to age 95 (less in New York).
You may also convert this policy to one of our permanent policies. For issue ages less than 65, this policy is convertible in the level term period only (e.g., 10, 15, 20 or 30 years) or age 70, whichever is earlier. For issue ages 65 and over, the policy is convertible for 5 years.
Who’s it for?
People who know they need coverage for a certain number of years, such as a small business owner who has a short to moderate-term risk to cover; or people who are unsure of their long-term goals and want something affordable today, with the opportunity to change their minds tomorrow
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