Term Life Insurance

When to choose term life?
Most people choosing term life have a strategy for long term net worth. They need specific coverage for a period of their lives to protect debt, loved ones, and children. For a homeowner with children it might make sense to have a term life policy to cover the mortgage and living needs until their children are old enough to provide for themselves – in this case the term would expire around the time your children move out.

What is term life?

Term life insurance is simply life insurance with a finite time period.  You can purchase a term policy with either 10, 15, 20, 25 or 30 year terms.  The premium is level throughout the whole term and at the end of the term, you have the option to renew the coverage annually up to a certain age (varies by insurance company).

The main benefit of term insurance is the cost. Term life insurance typically has significantly lower premiums than permanent policies because, while a permanent policy’s death benefit is guaranteed for life (no matter how long it is), a term policy will only pay the death benefit if the insured person passes away during the term period.

Unlike permanent policies, term life insurance does not accumulate any cash value. It offers pure insurance coverage, similar to home owner’s insurance or automobile insurance.  If your house or car doesn’t sustain any damage, the policy will not pay nor will you get your premiums back if there are no claims.  Term life insurance works the same way – if you pass away, your beneficiaries will receive the death benefit.  If you outlive the term of your policy, no benefits will be paid and you will not receive the premiums back.

Is my term policy convertible?

Most term life insurance policies are convertible to permanent life insurance policies. Convertible policies can generally be converted to permanent policies within a specified period of time from policy issue, without providing new evidence of insurability (unless you increase your benefits).

Choosing the right life insurance policy is often a difficult decision give us a call for a quote that will match your exact needs.


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