Term life insurance is generally the most affordable way to provide protection for loved ones if the need for life insurance will only last for a certain period, period such as twenty years. This timeframe often coincides with a mortgage payment, how long until a child’s college funding needs last, or how long a person is providing for their spouse with their income.
The loss of income and household contributions can be a worry for many families. Everyday expenses may be difficult to pay with a reduced household income. Life insurance death benefit proceeds can be set aside to pay for these ongoing expenses.
Coverage + Options
Guaranteed Level Term
The most common type of term insurance. Also the simplest, with premiums that remain the same through the life of the policy. May or may not be renewable.
Often referred to as Annual Renewable Term (ART) because these policies are designed to renew at the the end of every year, though premiums usually increase.
Allows the insured to renew their policy with an identical one when the term has expired. Only change in premium based on age. Come in 1 and 5 year varieties.
Big draw: no insurance medical exam required and only a few questions to answer. Still comes with a variety of terms, prices, and options. Premiums may or may not increase depending upon configuration.
Return of Premium Policy
Provides the option to have your premiums returned at the end of your policy if you are still alive. Different configurations, but generally higher premiums.
Convertible to Cash Value
Allows policy owner to convert policy to some form of cash value coverage. New premiums based on age at time of conversion. Various stipulations.
Approval for Life Insurance with No Medical Exam
Multiple life insurance companies have rolled out accelerated underwriting programs where the application do not have to complete a medical exam in order to take out a life insurance policy. The insurance company gathers personal information from multiple sources and decides if they want to make an offer for life insurance without the proposed insured having to take a paramedical exam. This eliminates the need for a blood test and other prerequisites. Coverage limits for these types of policies are typically limited to death benefit amounts of 1,000,000 to age 50 and 500,000 to age 60. If someone does not want to go through the paramedical exam process, applying for life insurance with a company offering an accelerated underwriting program becomes a great option.