Introduction
Term insurance is a temporary type of life insurance policy that covers a given period of time; let’s say 1, 5, 10, 20, or more years, depending on the life term insurance quote. It also happens to be the cheapest and simplest form of life insurance.
Who should get Term Life Insurance?
Here are some of the benefits you can accrue from a life term insurance policy, in the event of death:
- Cover debts or liabilities
- Pay for higher education
- Replace an income stream
- Pay for child care
- Protect against the loss of a key employee
- Fund a buy-sell agreement for a business
History
How it works
The typical term life term insurance quote guarantees a fixed premium. Payments will remain constant throughout the life of the insurance policy. The policy owner can discontinue payments at any time, at which point, the policy is also terminated. It also guarantees a Fixed Death Benefit, which means that regardless of how long the policy has been in force the death benefit will be of a certain amount. This applies even if you die on the first day of coverage or the 50th year.
Features
What Happens At its Maturity?
A term insurance policy quote will only cover a policy holder for a set period. This implies that a 20 year policy will only cover 20 years and no longer than that. At the end of the term, the insured can still continue paying the premiums, but they will be at a much higher rate than before. The fixed rate that was there before will be adjusted. Conversion is the other available option. This works by replacing your term policy with a permanent life insurance policy of the same face amount death benefit. Some insurers will only allow conversion within a given period of time. Renewal is another option that allows the insured to replace the term policy with a life insurance policy of the same type, face amount and health class. This option spares you from being assigned to a more expensive health class.
Tips and comments
Term Life Insurance Quotes
Quotes are the prices that an insurer declares based on what they can ascertain about your life expectancy. Therefore, quotes tend to vary depending on an insurer's evaluation criteria. No insurer is going to issue you with a policy that is solely based on what you write about yourself on a quote form, this is why there will be a difference in the actual offer and the term insurance quote. Insurers will first want to establish the accuracy of the information indicated on the application form. It is therefore important that you provide honest information in the application, so as to improve your chances at getting the right quote for your health class.
How to Shop for Term Life Insurance
Make an objective self assessment. Determine how long you will need coverage and what death benefit you require. Most people will opt to take the cheapest quote offered, while others will go with the company that has the best service or high financial rating. You could also choose to use a trusted brand name in the business.
