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What
is Term Life Insurance
-Term Life Insurance provides temporary coverage
for a specified period of time, in increments
of years. Usually these periods are from 5,10,15,20,
even 30 year term products are available, but
be sure to understand the guarantee period for
any policy purchased. See: "Can the rates
increase?" below.
The beneficiary receives the death benefit if
the insured dies while the policy is in-force;
no benefit is paid if the insured survives to
the end of the term. Policies do not build up
cash value, so if the policy is surrendered,
the policyholder does not receive any cash value.
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Why purchase Term Insurance?
-Term policies are designed to meet a specific
need for a stated period of time. They are sometimes
purchased to supplement permanent insurance.
Term insurance is useful for pure protection
needed for a definite period at a low cost.
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Can the rates increase?
The Triple X legislation adopted by most states
January 1, 2000, has changed the rates and guarantees
on term insurance as we knew it before Dec.
31, 1999. While many companies are still getting
their Triple X compliant products approved through
the states, many have come out with these products
and the insurance consumer should have a complete
understanding of the product before they make
that purchase.
Premiums remain level on guaranteed term insurance.
Initial premium rates for term coverage may
be lower than those for permanent insurance
products because of the limited periods of protection
and absence of cash value, but the premiums
can escalate upon renewal, as the insured gets
older or as the duration of the term increases
past the guaranteed period.
The products being offered that we sell range
from full guarantees on 10, 15, and 20-years
at competitive rates to mid-range guarantees
and short term guarantees.
The mid-range guarantees generally include 5
and 10-year level premium plans with rates guaranteed
level for only the first five years. 15, 20,
and 30-year level-premium plans with rates guaranteed
level the first 10 years.
The short-term guarantees are on term products
for 5, 10, 15 and 20-year level-premium plans
with rates guaranteed level the first 3 years
only.
Every company's products will differ, so be
sure to read the illustration provided.
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Is a Term Insurance
policy Convertible?
-A feature of some term insurance policies is
"convertibility". This allows the
policyowner to convert the term policy to a
permanent insurance policy that builds up cash
value. Generally, no additional underwriting
is required to exercise this option.
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How much coverage do I
need?
-Our experience is that people typically are
securing term insurance to either cover a personal
or business loan, or to replace family income
in the event of premature death.
If for a loan, the balance due determines the
amount of coverage needed.
If to replace family income, the proceeds should
be enough to take care of your family. With
the insurance proceeds and prudent investing,
your family would be able to replace your annual
income. Many experts advise at least three to
five times your annual earnings.
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How long should my coverage
be for?
-The answer is a highly personal one, and will
vary depending on your health, your age, and
your current and expected financial situation.
Term insurance will cover you only for a period
of time. The policies can have a good rate for
the guarantee period of 5,10,15,20, or 30 years.
After that you will have to re-qualify to have
the policy renewed for another term period.
That new term period will usually be at a higher
rate, based on your current age and health.
If something has gone wrong with your health
during that term of time, then you may be forced
to pay annually increasing premiums after the
level guaranteed period in order to continue
the coverage. So you need to carefully evaluate
how long you will need life insurance.
We can help you to analyze how much coverage
you need simply fill in this Free
Quote request form
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