Term life insurance is a temporary life insurance policy that offers death benefits to the policy holder’s beneficiary in lieu of premiums paid during a particular term period. Terms can be for one year (renewable), 5, 10, 15, 20, 25, or 30 years.
Term life insurance is popular because it offers high death benefits at cheap premiums. This is good for families who have financial constraints and yet desire high coverage for their family. Growing families usually opt for term life policies.
Types of Term Life Insurance
There are two basic types of term life policies:
Level Term Life Policy. Level Term, as the name indicates, the death benefits remain level during the entire term period.
Decreasing Term Life Policy. A decreasing term life policy begins with a high premium and high death benefits which decrease as the term comes to an end.
Options in Term Life Insurances
Term life policies do not offer any cash value or surrender value. There is nothing gained by the policy holder, if he or she should survive the term on a standard term policy.
There are options available in term life policies which can give you some added advantages:
Renewability options. This is useful should you survive the term period and anticipate needing continued coverage. Renewability options give you the advantage of continuing your term life policy for another specified term without having to provide proof of insurability.
Return of Premiums(ROPs). If you have paid up all premiums during your term period, this option returns to you the sum of all premiums paid when the policy comes to an end. This option will generally cost you 20% to 30% more than a standard term policy.
Convertability Options. This option allows you to convert your term life policy to a permanent life policy, without having to provide evidence of insurability. Some companies allow convertability only in the first few years of the term policy; others may allow it at any time during the term period. This can be to your advantage if you feel that at some later stage in life you would like to have the option of converting to a permanent policy.
Other Features. Some life insurance companies may offer add-on features such as:
Waiver of premiums in cases of disabilities that last six months or longer. In such a situation, you may not be able to pay premiums. Waiver features prevent your life policy from lapsing in such cases.
Accelerated death benefits allow the policy holder to draw early benefits from his life policy if suffering from a terminal illness. Such benefits help to pay expenses for treatment.
Accident riders. This features doubles or triples the life coverage if death occurs by accident.
There are several vital reasons why you should insure yourself, particularly with a term life policy. These could be:
Cheaper premiums, high death benefits
To provide the same standard of living for your family after your demise
To provide for an education fund for your children
To pay off debts, mortgages so that your spouse and family do not inherit these debts
To meet funeral expenses
To meet federal tax payments on the estate
To provide for you aging spouse
To protect your spouse’s retirement savings
Life insurance can be purchased at any stage in life and it is as essential for married couples with growing families as it is for the elderly. You may be a single parent, or a stat-at-home parent, life insurance can provide much needed cash for your family even after you have died. Knowing that your precious family is provided for can bring you peace of mind and a sense of security.
About AccuQuote:
AccuQuote is a leader in providing term life quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term life insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.
What do you think about this article? Do you agree or disagree with it? Be the first to comment on this article, and share your thoughts with the world. No registration is required to post comments.
Term life insurance is a temporary life insurance policy that offers death benefits to the policy holder's beneficiary in lieu of premiums paid during a particular term period.
The phrase "BUY TERM AND INVEST THE DIFFERENCE" evolves around the concept of term life policy which is a basic protection policy and the endowment/ whole life policy which has protection and investment/saving
Mortgage term life insurance is a service that has existed for a long time, but is experiencing a boom in popularity because of demographic alterations and narrowing the underwriting principles of the business
New to life insurance? Like most newcomers, the initial dilemma you will face is making a choice between term life insurance and a permanent life insurance policy. This dilemma is easily resolved by...
When buying life insurance its vital you get the right policy for your needs. With a plethora of web sites offering discount life insurance, it's often easy to end up with a policy that is not suited to...
Term life insurance quotes are rarely a concern of single people, but they should be. Unfortunately, there is a misconception that term life is something owned only by families in the event that the chief...
Before you decide on a policy, you should do some term life insurance comparisons. This is a product that could care for your family for the remainder of their lives, in case something happens to you....
Life insurance, whether you need term or whole life, can be a major expense. We all know the importance of having adequate life insurance. The protection of loved ones is the major thing on the minds of...
What exactly is Term Life Insurance?Term life is a form of life insurance where you're covered for a number of years - the number of years is called the term. Term life insurance policies can be for as...
Cheap term life insurance is easier to get than most people think. Dealing with a life insurance company has been made much simpler thanks to the Internet. No more spending hours of precious time with...
These days, people are living longer, working harder, and staying more fit. People in their middle ages are having kids later and also caring for the aging parents
The main determinant of the nature of life insurance products chosen by an individual is his or her financial circumstance. People who are major income earners in their households are encouraged to get...
In order to be sure that you secured a good financial prospect for your family, buying life insurance policy can help you achieve that. You are sure to that the proceeds will provide money for living...
The main component taken into account by life insurance providers when deciding your life insurance premium is your health status. Most life insurance India companies require the person requesting a life...
Insurance coverage is something that is considered obligatory these days, especially life. Life is unpredictable, and we need best life insurance to be with.
Nowadays, ULIPs are the most talked about option as far as financial investment planning is concerned. Certain latest guidelines declared by IRDA ( to be implemented from 1st September 2010), like...
When we talk about potential future losses, we might come across a situation where a loss may not happen at all. There should be proper understanding about the insurance policies before you own it. Here are...
Life Insurance is something that most people don't usually like to think about, but is one of the most important investments that you can purchase. Insurance policy is very cheap, and you can get a lot of...
Unit Linked Insurance Plan (ULIP) is a financial option that combines insurance safety through savings and growth opportunities from returns. ULIP is a mode of providing life insurance wherein the policy value
ULIPs help you to manage your risk return profile. With the double advantage of security and investment, ULIPs lately have become the most popular insurance product from the available range of life...
Financial planning involves drawing up a comprehensive plan for all your life's events. It should take into consideration protection, savings, retirement and your investment needs. A financial plan...
There are several good reasons why it is important to review your life insurance coverage periodically. For one thing, when you took out a policy your financial situation was different from what it is...
Now that you are ready to purchase life insurance, the choice before you is what type of life insurance would best suit your purpose. Life insurance is not a one-size-fits-all product and each one must...
A mortgage life insurance is a type of insurance policy that is designed to pay off your mortgage in the event of your untimely death. The insurance company will pay off any outstanding balance left on your...
Thanks to the Recovery Act, Americans are enjoying an average tax refund that is up nearly 10 percent! The average tax refund in 2010 was a record $3,036.00, up $266.00 from the previous year.
If you own a life insurance policy, makes sure your beneficiary knows exactly what to do when the need arises. A beneficiary is the one who receives the proceeds of your death benefits. It's only right that...
If you have recently had a heart attack, getting life insurance at a fair rate may not be as difficult as you think. Depending on the severity of your condition, there are some medical underwriters that may...
For most of us, the economy has hit our pockets hard. Trying to make ends meet, who hasn't missed a few credit card payments here and there? You may think nothing of it, but your life insurance carrier...
A life insurance policy is basically a mutual agreement between your life insurance carrier and you. You agree to pay a certain amount of premiums for a stipulated number of years.
Article: The Basics Of Term Life Insurance Author: Denise Mancini Publication Date: 2009-01-22 Total Views: 214 Word Count: 682 Category:Home /
Finance / Insurance / Life Insurance
Categories
