Term Life Insurance
Term life insurance is one of the most
affordable forms of Life Insurance coverage available. It is temporary life
insurance that provides coverage for a limited time period. You can purchase
Term Life Insurance in 5 year term increments from 10 to 30 years.
Each year, a premium is paid to cover the risk of death during that year.
The premiums on the term policy are level for term of the policy. This is known
as guaranteed level term. The premiums on some term policy increases slightly
each year as the insured grows older and the risk of death became greater. Once
the term is over, the insured has the option to either drop the policy or pay
annually increasing premiums to continue the coverage.
Term Life Insurance has no actual cash value; it is a pure death benefit.
Its primary use is to provide coverage of financial responsibilities for the
insured. The only way to collect on a Term Life Insurance policy is for
the insured to die during the term, before the life insurance policy expires. If
death occurs, the death benefit will be paid to the beneficiary of the life
insurance policy, free of income tax. Term life insurance is not an investment
as it does not build cash value over the course of the policy term. This is in
contrast to asset building life insurance policy options such as whole life,
Indexed Universal Life, and universal
life.
Call Affordable Insurance Pro to find out if Term Life
Insurance is the right solution for you.
Common options for term polices
The
Waiver-of-Premium Option frees the insured from paying premiums if they
were to become disabled before a certain age, typically 60 or 65. There is
generally a 6 month waiting period after disability. The insured must continue
to pay premiums for 6 months after the disability. Some older policies will
refund these premiums if disability is longer than 6 months, but most new
policies will not offer refunds. The insured must be disabled as defined by the
policy, and must provide evidence of disability to the insurer. Disability is
generally defined as the inability to perform the duties of any occupation for
which the insured has education and experience.
Disability Income (DI) pays a monthly income if you were to
become disabled. This is Short Term Disability (STD) usually 2
yrs. Some policies have a 5 yr option. The quaulification are
similar to the Waiver of Premium Option listed above. If you
need Long Term Disability (LTD) Coverage you will need to purchase a
seperate Disability Policy.
Call Affordable Insurance Pro to find out more about
Waiver of Premium and Disability options.
Return of Premium Term Life Insurance (ROP) is a new
option that offers a guaranteed refund of the term life insurance premiums at
the end of the term period if the insured outlives the term. Essentially, if no
death occurs, you receive all your premiums back. It's also tax free! While the
premiums are typically slightly more expensive for these policies, the insured
now has the option to either "rent or buy" their life insurance coverage, and
receive the entire return of their premium investment back at the end of the
term agreement. Additionally, the premium levels are designed to remain level
through the course of the policy so as not to be financially erratic. Policies
are available in 15, 20, or 30-year term versions.
Some Tips and sample quotes for Term
Life.
Call Affordable Insurance Pro to find out if the Return
of Premium Term Life Insurance option is the right life insurance solution for
you.
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