Term Life Insurance
Term Life Insurance is the most popular type of life insurance available today because it is so affordable. But what is Term Life Insurance? As the name implies, term insurance it is designed for a specific term (length of time). You purchase term life to provide coverage for a guaranteed number of years: 10, 15, 20, 25 or 30 years. The premiums are 100% guaranteed for the term period you select. So your premium can never increase. This allows families to budget for it.
A few term life insurance companies even offer a return of premium option for an additional cost, usually 50% of the premium. For an example, if your term premium is $800 a year and you add return of premium, it increases your premium to $1,200. This allows you to receive back 100% of the premiums you have paid into the plan at the end of the term period.
Term Life Insurance, how long do I need the protection for?
- The number of years left on your home mortgage, if you wish to have it paid off at the time of your death.
- The number of years left on a personal or business loan that you need to insure as a condition of the loan.
- The age of your youngest child may help determine the length of protection, if you wish to provide enough money to cover the cost of raising and educating that child, if you were to pass away.
Quite a few people choose a term insurance policy that provides coverage long enough to get their children through college. The most popular lengths of term are 20 or 30 years. That’s because it gives you a long, guaranteed protection period. During those 20 or 30 years, most people have raised their children and paid down on their home mortgage.
The face amount (death benefit) is also guaranteed to remain level for the number of years you select. It will not decrease each year, but will remain level for the number of years you select. Term insurance provides you with a GUARANTEED contract: GUARANTEED level face amount; GUARANTEED length of time (10,15, 20, 25 or 30 years); GUARANTEED level premium (one that can never be increased during your specified length of time).
Having a guaranteed level term insurance premium is important because if your health changes during this period, the insurance company cannot raise your premium. If this should happen, please consider converting your policy to one that covers you to age 100. Yes, the premium increases because you are now covered to age 100 versus the number of years remaining on your term policy.
Some of our companies now offer living benefits to their term portfolio. These benefits are built into the policy at no cost to the consumer. They provide an income tax-free cash benefit for chronic illness, critical illness, and terminal illness. With today’s policies, you do not have to die for your family to collect on them.
Ask us how we can assist you with your life insurance needs.