TERM LIFE INSURANCE
Term life insurance protects your loved ones in the event of your death. Term life insurance allows you to pay monthly fees, called premiums that qualify your survivors to receive benefits if you die within the term. Term life insurance is distinguished from permanent life insurance, which, when you continue making premium payments, guarantees insurance protection for life.
Features of Term Life
Length of Term — The term may be just a year, in which case the death benefit is paid only in the event the insured dies during the year of coverage. In the event you choose level term life insurance, the insured is covered under a guaranteed premium for several years such as 10, 15, 20, or 30-year coverage.
Premiums — The premiums of term life insurance start lower than the premiums of permanent life insurance, then increase when you renew the policy at the end of the term. Term life can be an affordable option for life insurance.
Renewal — Because of the increasing premiums when term life insurance goes up for renewal, renewing term life insurance may prove too expensive. Renewal of the life insurance policy is also contingent on whether or not you still qualify.
Cash Value — Unlike whole life insurance or universal life insurance, which are two types of permanent life insurance, term life insurance has no cash value. A life insurance policy with cash value might make you eligible to borrow loans and even to borrow against the policy to pay premiums.
30 Year Return of Premium (ROP) — Is a form of term life insurance that provides for return of premium as well as payment of the face upon death of the insured. This is usually accomplished with increasing term insurance.
Other Features of Term Life
Accidental Death Benefit — Pays an additional face amount if death results from an accident.
Accelerated Death Benefit — This benefit allows you under certain circumstances to receive the proceeds of your life insurance policy before you die, such as terminal or catastrophic illness or the need for long-term care or confinement to a nursing home.
Child Rider — Children can be added to the policy as a rider under the parents policy from birth to age 25.
Conversion Privilege — The guaranteed ability to convert a term policy to a permanent policy at any time during the duration of the term. No evidence of insurability is required. This option is included automatically on some policies, but not all. Check with your agent.
Guarantee Issue Rider — Guarantees the future issue of additional life insurance with no evidence of insurability. You are insuring your future insurability.
Waiver Premium — If you become totally disabled for a specific period of time (usually 6 months or more) you don't have to pay premiums for the duration of the disability.