What You Need to Know
About Term Life Insurance
Term life policies provide coverage for specific periods of time, sometimes as little as one year. While you usually can renew term life policies for one or more terms even if your health has changed, there's potentially a big risk here if you get sick during the term.
* Note. You should also ask whether you would lose the right to renew the policy when you reach a certain age. Because this coverage is fairly cheap, it's often a good option for young people in good health that can't afford to buy "permanent" coverage.
Here are a couple of term life policy options:
Renewable and Convertible Term Life Insurance
This is coverage for a specific "term", thus the name term insurance. Most term insurance is renewable to age 95 or 100 but the premiums are only guaranteed for a certain period of time and after that they rise astronomically. Annual renewable term insurance policies have premiums that increase every year and are often the best buy for a year or two. If you need coverage for a typical term (to cover a mortgage or until your youngest child graduates from college), a 10, 15, 20, 25, or 30 year term policy may be the most appropriate choice. Policies are available with premiums that are guaranteed for either the full 10 to 30year term, or for just a portion of the term. Make sure you are clear which type of policy you have or are considering. Get Your Term Life Insurance Quote Today!
Term Insurance With Return of Premium
This coverage is usually for a 30 year period. It is more expensive than basic term insurance, but... it has the added feature of getting all of your money back if you don't die within the 30 years. Some people liken term insurance to renting a house rather than buying one, only with this type of policy you get all of your "rental" payments back!
Conversion
At some point you may consider it wise to convert or change your term insurance to Permanent Cash Value Life Insurance. This guaranteed conversion right varies by company. Some allow this valuable benefit for only the first few years of your term policy. Others allow conversion up to a specific age like 65 or 70. Ask your agent to help you understand this policy feature. Sometimes it is wise to pay a little more to get this right for a longer period of time or to an older age... just in case.
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- High Risk - For people with illnesses or hazardous occupations.
