Learn about term life insurance


Term insurance is an affordable way to buy maximum life insurance protection for a temporary period of time. Term Life insurance builds no cash value. It pays a benefit only if you die during the term of the policy coverage. If death occurs, the beneficiary collects the face amount (death benefit) of the policy income tax free (under current IRS regulations).

Insurance Companies offer level premium term insurance with rate guarantee for a periods of 10, 15, 20 and even 30 years. Premium rates increase at the end of the guaranteed premium period. These policies have become very popular because of their low cost and the availability of long term coverage. Policies require evidence of insurability be furnished at renewal to qualify for the lowest available rates. It is important to understand the terms of any insurance policy that you are considering before making a purchase.

When is Term Term Life Insurance the Right Choice?
If the lowest dollar outlay is your main concern, and your insurance need is for a period of 30 years or less, term may be advantageous. If your need for coverage will last beyond 30 years, a low cost Universal Life or Whole Life policy may be more effective. We will supply those upon request, however our main focus here is Term Insurance. Should your life insurance needs change, these term policies carry a conversion privilege that will allow you to convert your term coverage to permanent Universal Life or a Whole Life policy without a medical examination. It is important to check the conversion privileges of a term policy before you make your purchase.

Term Life Insurance – Advantages
– Initially, Term Life premiums are lower than for permanent life insurance, allowing you to buy higher levels of coverage when the need for protection is often greatest. – It’s good for covering specific needs that will decrease or disappear over time, such as mortgages or family income needs for children, spouse etc. – Term insurance is an effective way to get the most coverage at the lowest cost for up to 30 years.

Term Life Insurance – Disadvantages
– Premiums increase after the guaranteed level premium period. – Coverage may terminate at the end of the policy term or may become too expensive to continue. – Generally, the policy doesn’t offer cash value or paid-up insurance.

How Can I Apply for a Term Life Insurance Policy? Compare some of the best resources right here.

What Type of Medical Exam is Required?

This-exam is required for most life insurance companies. This process can be completed at your home or any other convenient location. The exam takes about 15-30 minutes and is conducted by a licensed paramedic or medical doctor. An exam generally involves blood and urine specimens, blood pressure, height and weight measurement. In addition, you are asked a series of questions regarding your medical history.

When Does My Insurance Coverage Begin?
Immediately Temporary or conditional coverage at the completion of the medical exam provided a premium payment is made when the application is mailed. This coverage is in place until the insurance company issues the policy or declines coverage. Temporary coverage is usually limited to the amount of insurance applied for or USD 500,000 whichever is less. If you are replacing an existing policy, it is very important to continue your exisiting insurance coverage until a new policy is approved at a satisfactory premium.

When Do I Make My First Premium Payment?
You make your first premium payment with the application. Coverage will begin in most cases after both the medical exam and underwriting are completed.
Can I Be Sure the Company is Safe and Financially Sound?
Our staff has carefully evaluates the financial strength of each company we are affiliated with. Life Insurance Companies are rated A+ (Superior) by A.M. Best, an independent rating organization that assigns its rating based on a variety of factors, including operating performance, asset quality, financial flexibility and capitalization. Our Life Corporations has received consistently high ratings from the leading independent rating services.

Coverage on Spouse and/or Children?
You may want to consider having coverage on your spouse even if he or she is not currently employed. The financial pressure on a family due to the premature death of a spouse can be significant. It may be necessary to deal with various family issues that occur after the loss of a spouse. Often the surviving spouse will take time off or make other necessary career adjustments to spend more time with his or her children. Insurance coverage for children is available to cover final expenses and can also be provided to guarantee insurability for a child’s future.

What Are Preferred or Standard Rates?
In order to receive preferred rates, which is what you have been quoted, you must be in excellent overall health and lead a healthy lifestyle. Each company determines limits on weight to height, cholesterol, blood pressure and you must not have any significant personal health problems. Family health history is also a factor used in qualifying for the lowest preferred rates. You cannot use tobacco products of any type. You must not have a history of alcohol abuse or drug use. You may not be involved in hazardous activities. Each company determines its criteria to qualify for preferred rates. It is possible for one company to rate an individual as standard and another company to rate the same person as preferred. Our staff will help you get the lowest rates possible for your situation. We are constantly monitoring each company’s guidelines so that we can assist our clients in getting the best rates and coverage possible.

What if I Smoke or Use Other Tobacco Products?
Smokers’ rates are higher than for non-smokers. In order to qualify for non-smoker rates, most companies ask that you be a non-smoker for at least two years. In many cases companies look at other tobacco (cigars, pipes, chewing tobacco) users much like smokers. Our staff is constantly monitoring the market for tobacco users to help you qualify for the lowest rates possible. We will recommend those companies when appropriate.

Can I Protect My Insurance if I Become Disabled?
An optional rider called “waiver of premium” will provide payment of premiums after six months of disability. Payments for insurance premiums will continue as long as you are disabled or as stated in the terms of the policy. This rider is available for purchase from most companies up until age 55. Coverage usually ends at age 60. See your quote.

Can My Policy Be cancelled ?
No. Once a policy is issued, it cannot be cancelled by the insurance company during the policy period for any reason including change in health, provided that the required premium payments are made and information on the application was not intentionally misleading or inaccurate. You will not be asked to provide evidence of insurability during the period of the policy. As a policyholder you may choose to cancel your policy at any time.

What Will My Insurance Cost After the Guaranteed Period?
Each insurance policy, if renewable, has a guaranteed maximum renewal premium which is explained and illustrated in the policy. The amount is the most you will have to pay to renew your coverage. After your initial guarantee period ends, you can reapply for new coverage with the same or a different company. If you qualify, you can begin a new period of guaranteed rates. This process is called “re-entry” if you qualify with the same insurance company. Since your future good health is not guaranteed, re-entry is not guaranteed. In the event you cannot qualify for a new competitively rated policy, many policies carry a conversion privilege. This feature allows you to convert your existing term policy to permanent insurance coverage (a whole life or universal life policy). Conversion time privileges and policies available vary from company to company.

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