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Term Life Insurance

Term life insurance is affordable life insurance packaged several different ways, each of which serves a specified purpose.  Term life insurance can be by itself or it can be provided as a rider with other policies.  Common terms are 10, 15, 20, or 30 years. Here are some characteristics of term life insurance:

  • No cash value
  • Temporary insurance in effect for a specified “term” of years or age
  • May or may not be renewable at the end of the term – if renewed the premium will reflect an increase at the attained age
  • May be convertible into a permanent life insurance policy without proof of insurability

Types of Term Life Insurance

  • Level term:  The premiums and the death benefit on a level term policy stay level until the end of the term.
  • Decreasing term:  The premiums are level to the end of the term with decreasing death benefits over the term.
  • Increasing term:  The premiums and benefits increase.
  • Interim term:  Protection that starts immediately with permanent insurance protection starting at a later time.  With interim term, term life insurance is bought to cover the interim between ow and the time permanent protection begins.

One of the main advantages of term life insurance is its low cost compared to permanent insurance.  With term life insurance, you are typically just paying for the death benefit, whereas with most permanent policies, premiums help fund the death benefit and also can accumulate cash value.

Who Can Buy Term Life Insurance?

If you are between the ages of 18-75 you may be able to purchase term life insurance.  These policies are underwritten, therefore, the younger you are and the healthier you are, the lower the premiums will be.  Some people may not qualify for term insurance due to terminal illness or other health related factors.

Other Types of Life Insurance

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