Term Life Insurance
What is term life insurance? Term life insurance provides life insurance coverage for a specific number of years. The face amount of the policy is paid only if the insured passes away during the stipulated term, and there is no pay out if the insured outlives the life of the policy. The policy is said to expire at the end of the policy term. You can purchase a 30 year term life insurance plan quickly and conveniently online.
Term life insurance is more comparable to property and liability insurance than to most other life insurance contracts. Let’s say you have a building that is valued at $100,000.000 and it’s covered for that amount for five years, the insurer will only pay this amount if the building is destroyed during that term. In the same way, if a person has $100,000,000 of life insurance for a five year term policy, the insurer will pay out that amount of if the insured dies before that five year period is up. Nothing is paid if the person survives beyond the contract period.
The initial rates per $1,000 of coverage tend to be lower for term life insurance than for other life products provided under similar provisions. However, it’s important to those same rates can increase quickly as the duration of the policy lengthens.
When shopping and reviewing life insurance plans, term prices are usually easier to compare since they are structured simpler than other types of policies. Usually they don’t have any cash values or dividends, thus allowing comparison of policies based on the premiums. This usually leads to more competitive pricing as compared to other life insurance products. Because of this some insurance companies and many consumers, treat term life insurance more as a commodity – an item that is basically the same irrespective of the supplier and therefore is sought out at the cheapest price.
Because commodity profit levels are usually lower, many insurance companies attempt to set themselves a part through the term life insurance policies to avoid commodity “term wars”. However, term life insurance consumers as a whole tend to be price conscience and consider most term life insurance policies to be easily replaceable since there usually aren’t any early termination fees.
Almost all term life insurance plans allow for policy holders to continue the policy for a limited number of additional periods. These renewal options allow the insured to continue the policy without reference to the insured’s insurability status at the time of renewal. However, most life insurance companies limit the age (generally after 65) to which such term policies can be renewed. This is one reason life insurance quotes over 50 is popular.
If you have other questions on term life insurance, give our agents a call. They’ll be happy to answer any questions you may have.