Term Life

Term Life Insurance

Term Life Insurance is well known for its lower premiums and time structured value for the insured. Term Life a good linsurance policy for someone who is in their younger years and can better afford a low cost life insurance policy, or for someone who needs immediate coverage for a selected amount of time in case of an unexpected death. A Term policy provides a set death benefit during the period of time or "term" of the policy.
Term contracts can be issued under 4 different underwriting catagories:
  • Immediate Issue: No Underwriting Required.
  • Questionnaire Underwriting: A short form or brief phone call by the insurance company to the proposed insured.
  • Paramedical Underwriting: Underwriter will require a physical, bloodwork, and Urinalysis.
  • Full Underwriting: Paramedical testing and medical records for the proposed insured.
Term Life Insurance is usually set in durations (terms) of 10, 15, or 20 years. During the term period, the insured is entitled to the full benefits of the insurance contract. This type of policy has been used for purposes of covering the replacement costs of large personal investments including:
  • Paying off a mortgage for the primary insured during the length of the mortgage.
  • Covering a child's college tuition costs.
  • Paying off a vehicle or luxury item during the time payments are owed for that particular item.
  • Paying funeral expenses, medical expenses in the event of an untimely death, hospitalization, and some longterm care expenses.
It is important to know that Term Life Insurance is a temporary life insurance policy and the insured must consider the primary need for that type insurance before choosing which one would best suit their particular scenario.

Premiums

The premiums are usually lower than those in a permanent life insurance policy because there is no cash value in the policy, and the policy will lapse over a set time. Premiums paid into the policy during the term are lost at the end of that term. Some term policies can be converted into a longer term or permanent life insurance policy based on the policy rules set forth by the insuring company who sells the policy.
PLEASE NOTE: IF YOU ARE AN EMPLOYER CONSIDERING A BENEFIT PLAN FOR YOUR EMPLOYEES, WHILE CREATING A CORPORATE TAX WRITE-OFF, TERM LIFE INSURANCE IS A COMMONLY USED TYPE OF INSURANCE FOR THIS NEED. PLEASE VISIT THE CORPORATION STRUCTURED LIFE INSURANCE SECTION FOR MORE INFORMATION.
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