Term Life

With renewable term life, you can renew your life insurance once the term is up, even if you would normally not be able to qualify for term life due to health problems.

This life insurance is suitable to people having a considerable amount of debt and young children to support, or for young couples who need to have life cover. In such cases it is very difficult to pay the premium of a whole life insurance. Term life policy comes as an answer to this people. The biggest benefit being the fact that term insurance can provide fairly large amounts of coverage with relatively low premiums.

The coverage of the life insurance can be decided according to the amount of debts the family is having or the number of dependents and their financial needs in case the unexpected happens. The term or insurance term can be decided on the time your children or dependents will take to become financially self-sufficient. You should also consider your financial needs and those of your dependents.

Term life insurance is basically a “no frills” type of life insurance. It is a life insurance for a specified duration limit, or time. You buy a specific amount of coverage for a specific time period by signing a contract. You pay for that coverage period and at the end of the term the policy expires. For example, the term might be until retirement, or until children are grown, or until college is paid for. Term life insurance is the least expensive available insurance policy and allows you to spend a lot less and use the extra money in a better investment. It does not build up cash value and the premium normally increases as the policy owner gets older.

If you die while the policy is active, term life insurance provides a stated benefit for it; and your survivors will be paid the agreed upon amount. However, the policy does not provide any returns beyond the stated benefit and once the policy expires, the insurance coverage ceases and the insurance company keeps the money. Some term insurance policies give you the right to renew at the same rate for multiple years, while others do not. The former are generally a bit more expensive.

Term life insurance policies must be renewed when each term ends. Before buying a term life insurance policy, you should ask about the renewal provisions for the protection of your future insurability. There are some typical choices:

• Annual Renewable: This form of term insurance is the least recognized of all term policies. It provides a level amount of insurance but the premium increases each year at the policy renewal date. The premiums can be very low at first but can escalate into very high premiums as the insured gets older.
• Level Term: Level term insurance also provides protection for a specific time period. The face amount remains level throughout the stated period. This policy is often purchased for short term debt or intermediate term debt. You can purchase 5, 10, 15, and 20 year term policies from most insurance companies.
• Level Term: Level term insurance also provides protection for a specific time period. The face amount remains level throughout the stated period. This policy is often purchased for short term debt or intermediate term debt. You can purchase 5, 10, 15, and 20 year term policies from most insurance companies.
• Re-Entry: It requires a lower premium than an automatically renewable policy. You can renew at the same low rate offers to new customer; but you'll have to pass a physical examination. If you've developed any health problems, your premium could go up and cost more than an automatic-renewable policy.
• Convertible term: You’ll have the option to convert to a whole life insurance policy in later years.
• Decreasing Term: This policy is most commonly associated with mortgage protection insurance. The face amount decreases over a stated period of time. A thirty-year mortgage for a homeowner is appropriately insured by a thirty-year decreasing term policy for the same mortgage amount. The mortgage balance and the term policy decrease at about the same rate and so the homeowner can be assured that his home will be paid for whether he or she lives or dies.