Term Life Insurance
Term Life insurance is a kind of life insurance that offers coverage at a fixed rate for a set duration. More often, it is the most affordable among other types of life protection as it applies for a specific period. During the period of term insurance if the insured party dies, then the policy will pay the death benefit to the beneficiaries. People purchase term protection for a number of reasons. One of the most common reasons is policyholders may want to get the maximum protection for affordable premiums. In general, people buy term insurance policy to cover certain financial duties, like funeral expenses.
Unlike other types of life protection, term protection is less expensive and it has no cash value. Mostly, people purchase term life insurance based on the period it covers. Companies offer simplified term insurance with easy approvals and no medical exams. Such policies are based on small amounts, below $100,000. On the other hand, there are different levels of term policies available for 10, 20 and 30 years. In level term insurance, the premium remains constant for a specific length of time. As soon as the term ends, the cost of premiums increases substantially.
Among the different types of life protection, term life offers more flexibility to the policyholders. Term life insurance has two fundamental types: Renewable Term Life and Convertible Term Life. Both of them can be bought singly or combined.
With the help of renewable term life protection, a policyholder is entitled to extend the term life policy, or it may be renew for an additional term. In some cases, a renewal or extension can be made without any medical examination. Renewable term life protection is quite beneficial for middle aged policyholders as they can renew it as they grow older. A high risk is associated with individuals older than 45 years, so the premiums may be higher. The percentage increases as the person reaches 50 years of age, or above. However, while renewing the policy, the premium is increased based on the medical condition and physical changes in the body.
Convertible term coverage refers to the protection that can be converted to permanent life insurance. Convertible term life coverage allows policyholders to exchange for permanent cash value policy with equal value. This life protection can be converted without an underwriting and medical examination. Normally, this policy conversion is allowed for a person over 65 years old if health issues are a concern. Some of the convertible term protections are hybrid. This mean that the policyholders are allowed to renew for an extra term, or the policy can be converted to a permanent policy. In convertible hybrid term policies all the factors, including age and health, will remain the same. In addition, the option of conversion is available for the policyholders on an annual basis, irrespective of the term duration.
Life insurance companies offer affordable and sophisticated insurance plans due to highly competitive life insurance market. It is advisable for the policyholders to assess and compare term life protection offered by different companies and select the most appropriate one. Along with the affordability, it is also important to consider the flexibility and convertibility options associated with a particular term life coverage plan.
If you have questions regarding term life insurance, let Blue Sky Coverage help you find a policy that is suitable for you. Call us today to get a quote.