Term Life Insurance
Overview
Term life insurance, also known as term assurance, is a type of life insurance that provides coverage at a fixed rate of payments for a limited period, or "term." If the insured person dies during the term, the death benefit is paid to the beneficiaries. Once the term expires, coverage at the previous rate of premiums is no longer guaranteed, and the policyholder must either renew the policy, convert it to permanent coverage, or forgo coverage.
Key Features
Fixed Term: Coverage is provided for a specific period, such as 10, 20, or 30 years.
Death Benefit: Pays a death benefit to the beneficiaries if the insured dies during the term.
No Cash Value: Unlike whole life or universal life insurance, term life insurance does not accumulate cash value.
Renewability: Some policies offer the option to renew coverage at the end of the term, though premiums may increase based on the insured's age at renewal.
Convertibility: Some term policies can be converted to permanent life insurance policies without a medical exam, typically within a specified period.
What Term Life Insurance Covers
Death Benefit: Provides a lump-sum payment to the beneficiaries if the insured dies during the term. This benefit can be used to cover expenses such as funeral costs, outstanding debts, mortgage payments, and living expenses for dependents.
Exceptions and Exclusions
Survival Beyond Term: If the insured survives beyond the term, no death benefit is paid, and the policy expires unless renewed or converted.
Suicide Clause: Most policies include a suicide clause, which excludes coverage if the insured dies by suicide within a specified period, typically the first two years of the policy.
Misrepresentation: Coverage may be denied if the policyholder provides false or misleading information on the application.
Non-Payment of Premiums: The policy will lapse if premiums are not paid, resulting in the loss of coverage.
Factors Affecting Premiums
Age: Younger individuals typically pay lower premiums.
Health: Current health status and medical history significantly impact premiums.
Gender: Women often pay less than men due to longer life expectancy.
Smoking: Smokers generally face higher premiums.
Coverage Amount and Length: Higher coverage amounts and longer policy terms result in higher premiums.
Occupation and Hobbies: Risky jobs and activities can increase premiums.
How to Get a Quote
To get a term life insurance quote, visit our general insurance quote form or use our online chat option for personalized assistance.
Tips to Save Money
Buy When You're Young: Premiums are lower when you're younger.
Compare Quotes: Shop around and compare quotes from multiple insurers to find the best rates.
Maintain a Healthy Lifestyle: Improving your health can lead to lower premiums.
Avoid Smoking: Quitting smoking can significantly reduce your premiums.
Choose the Right Term Length