Term Life

Term life insurance

  Term life insurance is the easiest life insurance to understand: It provides death benefit protection without any savings, investment or cash-value components. Term life insurance is available for set periods of time such as 10, 15, 20 or 30 years. With "annual renewable term life," your policy automatically renews and premiums increase each year. Choose "level term insurance" if you want your premium to stay the same for the duration of the policy. Also available is "decreasing term insurance," where premiums remain level but your death benefit declines over time. This is useful if you want to cover only a specific debt that decreases, such as a mortgage or business loan. As long as you pay your premiums, the company cannot cancel you. Term life insurance is a popular choice because of the long rate-guarantee periods. However, if you get to the end of your policy term and still need life insurance, you'll need to shop for a new policy, which will then be priced based on your age and health status. Choosing an initial rate-guarantee period is easy: Match the period of time your dependents need your income to the available rate-guarantee periods. For example, if your children are young and you have decades to go on your mortgage, look at 30-year term life. If your children are leaving the nest and your home is paid off or nearly paid off, 10-year term might fit the bill. Other policy provisions that drive the popularity of term life insurance are guaranteed renewal and guaranteed convertibility. · Guaranteed Renewal. Before you buy a term life policy, ask the agent or company to confirm that the policy contains a guaranteed renewable option, which grants you the right to continue coverage beyond the initial rate-guarantee period without a medical exam. This feature, found in most term life policies sold today, is extremely important should you become sick and uninsurable toward the end of your rate-guarantee period. For example, say that you’ve been paying $800 per year on a $500,000, 20-year level term life policy and develop cancer near the end of the 20-year period, thus making you uninsurable. Assuming that you want to continue the coverage, a guaranteed renewable clause would allow you to continue the coverage beyond 20 years on an annual renewable basis without an exam, albeit at a much higher annual premium of, say, $8,000 in year 21, $11,000 in year 22, and so on. · Guaranteed Convertible. Another built-in feature of most term life policies is the right to convert your coverage to any permanent cash value policy that the company offers at current rates without having to take another medical exam. This feature may be useful in the future if you decide you want cash value life insurance. If you'd like term insurance to cover you for a certain period of time but you're confident you'll outlive the policy, consider a "return of premium" (ROP) term life insurance policy. Under this type of policy, if no death benefit has been paid by the end of your insurance term, all your premiums are refunded (tax-free). Return of premium term life insurance generally costs 50 to 150 percent more than a comparable term policy but it provides a way to hedge your bets no matter what happens.  Get your FREE no obligation quote HERE!