Term Life Insurance

What Is Term Life Insurance

Instead of covering the rest of your life from the moment you buy a policy, term life covers a fixed stretch of time, typically between 10 and 30 years.

Term life is essentially a contract between you and the insurance company stating that you'll pay a specified monthly premium and that the company will deliver an established death benefit if the policyholder dies within the policy's set length.

There are 4 primary kinds of term life plans you can buy:

• Level-Premium Term Policies: Your premium holds steady throughout the term. One of the most common types.
• Year-Renewable Term Policies: Renew your plan each year rather than after 10-30 years, with a required medical exam annually. Often ends up costing more than other term policies over time.
• Return-of-Premium Term Policies: When your term concludes, the insurance company refunds all of your premiums. However, the premiums run much higher than other term policies.
• Guaranteed Issue Term Policies: With this policy, the insurance company doesn't factor in your health for eligibility, making it far easier to qualify. As a result, premiums are much higher.

The Cost of Term Life Insurance

Overall, term life costs less than other life insurance policies. You'll need to pay a monthly premium, and that's roughly it. Premiums rest on a range of personal factors, including age, health, and sex. Men pay more than women, healthy people are eligible while unhealthy people may not be, smokers pay more than non-smokers, and older people pay more than younger ones.

The Benefits of Term Life Insurance

Term life offers a less-costly policy with the same death benefit choices. Because policies frequently run a maximum of 30 years, your insurer can extend a lower premium. On top of that, insurance companies will give you the chance to renew your policy. And if they don't, you can look for another term life plan elsewhere.

Term vs. Whole & Universal Life

Unlike term life, whole and universal life are regarded as "permanent" policies, meaning they don't have to be reassessed after 10-30 years. So as you weigh your options, remember that a term life plan's lower cost means you must honor the term and can't hold it indefinitely the way you could a permanent option. Still, for beneficiaries this is often well worth it.

Term life policies also lack the investing or cash value potential that whole or universal life offer.

Start Your Insurance Journey Right with Quottes—Call Today

The future doesn't have to be frightening. Carrying life insurance is one of the finest ways to invest in the futures of the people you love. To explore your options with some of the best agents in the business, call Quottes today.