What is Term Life Insurance?
Life insurance is a policy that pays money to your loved ones when you pass away – it’s a contract between you and the insurance company.
The insurance payout can pay off debts like a mortgage, cover the cost of living for your family for the coming years, pay for your child’s education or fund your spouses’ retirement, in return of you paying monthly premiums.
Term Life Insurance are insurance policies that cover you over the course of a term, which can be anywhere between 5 years to 100 years, depending on the insurer.
We know that each life insurance policy is different and suits different needs and circumstances. We can help you find the right coverage for you.
Why term life insurance?
- Financial security for you and your family in the event of a death or disability.
- Significantly more affordable compared to whole life insurance policies.
- Adaptable policy terms to best suit your needs.
- Once you’ve locked in your policy, your rates will never change for that term.
- Guaranteed death benefit.
- Peace of mind knowing your family is protected.
Things to Keep in Mind about Term Life Insurance
- Coverage and Term Length: Term life insurance provides a death benefit to the beneficiaries if the insured person passes away during the policy’s term. The coverage amount and term length are determined when you purchase the policy. Terms typically range from 5 to 30 years, although some insurers offer shorter or longer terms.
- Death Benefit: The death benefit is the amount of money that is paid out to the beneficiaries when the insured person dies. It is typically a tax-free lump sum payment and can be used by the beneficiaries to cover various expenses, such as funeral costs, mortgage payments, education expenses, or income replacement.
- Premiums: Term life insurance generally has lower premiums compared to permanent life insurance policies, such as whole life or universal life insurance. Premiums are based on factors such as the insured person’s age, health, lifestyle, and the coverage amount. Premiums are typically level and remain the same throughout the term of the policy.
- No Cash Value: Unlike permanent life insurance policies, term life insurance does not accumulate a cash value component over time. If you outlive the term of your policy, the coverage ends, and you generally do not receive any money back.
- Convertibility: Some term life insurance policies offer a conversion feature, allowing you to convert the policy into a permanent life insurance policy without the need for a medical exam. This can be beneficial if you decide later on that you want lifelong coverage.
- Coverage Renewal: Depending on the policy, some term life insurance policies may be renewable at the end of the term. This means that you can extend the coverage for another term, often at a higher premium rate based on your age at the time of renewal.
- Simplified Underwriting: Term life insurance policies often have simplified underwriting processes compared to permanent policies. While some policies may require a medical exam, others may offer accelerated underwriting, which relies on health questionnaires and data from external sources to assess your insurability.
- Purpose of Coverage: Term life insurance policies often have simplified underwriting processes compared to permanent policies. While some policies may require a medical exam, others may offer accelerated underwriting, which relies on health questionnaires and data from external sources to assess your insurability.
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