People buy life insurance – term life insurance because they realize the need of financial protection for their partner or family member after their death. Did you know that a life insurance policy can:
- Provide cash and income immediately following death, for expenses such as unpaid bills and taxes and other obligations.
- Prevent a partner from suddenly dropping from their accustomed standard of living after the death of the breadwinner.
- Provide continuous flow of funds for the living partner.
- Supplement income when earning power is destroyed by death, such as covering medical expenses.
The bottom line is this: While Life Insurance is not always the insurance product at the forefront of your thoughts, Life insurance is always a friend in time of need.
What term period is right for me?
There are several different reasons for purchasing term life insurance. The goal is to find what’s right for you. To help with this, we have included examples and suggestions (below) that have solved problems for others. Since everyone is unique, please feel free to discuss your needs and obligations with our licensed online specialist, the time is free. < class=”copy”p>5 Year-
Generally speaking, the more specific the need for insurance, the shorter the term period tends to be. For example, if you have a child going to college for four years and no need for the insurance thereafter, a five-year term may be perfect for you. Another example of the need for a five-year term period would be to protect your love ones during a short-term loan.
Let’s say that you are a business owner, and you need to protect or guarantee the earnings and knowledge of a key employee. If you don’t expect the employee to stay in the same position for more than 10 years, a 10-year term policy may be ideal.
Many people choose 15-year term policies to replace one or both of the partners income(s) in the event of death. This is especially useful where children may become self-supporting in less than 15 years, or mortgage on the home has less than 15-years remaining until it’s paid off.
This is a very common choice among people seeking longer-term coverage because of the cost-effective nature of the premiums. For example, over 20 years the total premium on this policy generally costs much less than purchasing a 10-year policy and then extending it for a second term. If you have young children at home, a 20-year term policy could be the perfect choice for seeing them through from childhood to college.
How would like to leave your loved one a home – free and clear of debt? If you have a 30-year mortgage, you can take out a 30 year term policy that will cover the entire mortgage period. This will remove any stress you might otherwise feel about leaving your family a financial burden instead of a safe place to live. One thing you might want to consider when buying a 30-year term policy is that the rates are higher due to recent legislation. Please review the following sections for options that may further reduce your premium over even longer periods of time.
What is the difference between a guaranteed and a non-guaranteed premium?
The term insurance quotes we offer come with two types of premium provisions: guaranteed and non-guaranteed. The first allows you to choose a term period of 5, 10, 15, 20 or 30 years. During this term, the premium is guaranteed to not increase or decrease. The second, less expensive one also allows you to choose from the same term periods of 5, 10, 15, 20 or 30 years. However, the premium is subject to change before the term of the policy expires. For example, you may have a 20-year term policy where the rates are projected to remain level for 20 years, but are guaranteed for only 10 years. You should be aware of these provisions before buying such a policy.
What do I do when my term period is finished?
When trying to decide which term period is right for you, it is important to know your options. You can always apply for a new term insurance policy after your term is expired. Toward the end of your policy, you will be contacted to let you know that the policy is about to expire. At this point you have three options.
New Policy- Depending on your age and health, you can apply for a brand new policy with either your existing company or a new company. The new policy will simply replace the former policy. You must be careful when doing this because new underwriting requirements must be met with a new policy. Be sure to keep your old policy in force until you know the outcome of your new application. If your health has deteriorated you might face extremely high premiums, or even worse you might be refused coverage.
Keep your existing policy- If you know your health is bad, you can continue paying on the existing policy after it expires. It will automatically continue as an extension of your existing policy. The good part about continuing a policy is that you will not need to provide medical evidence of your insurability. The downfall with this option is that the policy typically becomes annually renewable. This means that each year after the guaranteed term period has finished, the premiums will begin to increase substantially every year.
Convert to a Permanent Policy- You can convert your policy to a Permanent Life Insurance policy and lock in your premiums at a higher level for the rest of your life.