Term life insurance, also called universal life insurance, is life insurance that offers coverage for a specified period, usually a year to about 30 years, the applicable term. Term life is helpful because the premiums are affordable for most people; the death benefit, also called the death benefit, is paid directly by the insurer to the beneficiary, usually an immediate family member. Term life insurance is flexible, and there are no restrictions on the beneficiaries’ age, health, occupation, or source of income. There are even some term life policies under which the premium may be paid annually.
Some term Life Insurance policies provide coverage for one year up to a maximum of five years. Some policies offer a range of ten, twenty, and fifty years. The premiums for these longer terms can be costly. If premiums charged are based on age at the time of coverage, then people very often end up paying more for coverage than they would have for coverage in the first place if they had purchased a term life insurance policy at the age of forty. Many term life insurance policies do not require any medical examination, and there is no need to purchase annual coverage.
The main advantage of whole life insurance is that it provides cash value, which benefits the insured. This cash value is usually considered part of the death benefit. The amount of cash value is determined by the insurance provider. Usually the death benefit and the cash value are equal. However, the cash value is not taxable unless you take the earnings.
Most whole and term life insurance policies provide a named Beneficiary. A named beneficiary is a certain person or group of persons who receive the death benefit upon the death of the insured. Usually the beneficiaries are named according to the designation of the insured’s will. The insured may name more than one beneficiary.
Another common type of policy is the Preferred Plus Rate Policy. This form of term life insurance is also known as “preferred” coverage. In this form of coverage the insurer determines the rate of interest. If the insured deposits a specified percentage of the premiums in a savings account, the insurer may borrow funds up to a certain amount and pay the interest at this rate. Some preferred plus rate policies allow for increased flexibility in premiums.
One other type of policy is the Permanent Life Insurance Policy. This policy provides lifetime coverage and the premium is usually variable. With a permanent life insurance policy, at the end of the policy the insured has the option of purchasing a new permanent life insurance policy from the same insurer or from another insurer. In some cases the insurer will buy back the policy from the former insured at a predetermined price. The insured is able to choose a lifelong coverage policy in one of three forms: Level Term Life, decreasing Term Life, and increasing Term Life.
A final type of term life insurance policy is the Renewable Term Life Insurance Policy. This policy allows for the replacement of the premiums paid to the insurer. If the insured pays the premiums in full the insurer will replace them with a new premium. In order to be considered for the Renewable Term Life Insurance Policy, the insured may be required to have been a “fully covered” person for one year. Some of the most popular forms of Renewable Term Life Insurance are the “silver” level policies that provide coverage for up to ten or twenty years. Other policies may provide coverage for up to thirty years.
Choosing the right type of Term Life Insurance policy takes considerable thought and consideration. Term Life Insurance can provide a financial safety net for your family needs in times of adversity. Before you purchase any type of insurance coverage, it is wise to compare the cost of different policies. By comparing insurance quotes you can get the best insurance price for your family’s needs and budget. Term Life Insurance is a valuable way to protect your loved ones by providing the necessary coverage in a timely manner.