Term Life Insurance Quotes

Getting life insurance coverage is highly recommendable. This protects your family from the financial devastation that follows your untimely death. However, the irony is that those who should not do without insurance are the ones who sometimes can’t afford to buy insurance coverage.

Not so with term life insurance. It allows people (especially the young and the healthy) to get coverage at highly affordable prices.

What is Term Life Insurance?

Term life insurance is perhaps the most simple of life insurance products. Essentially, you buy cover for a specified number of years. If you die within this period, your beneficiaries will receive the proceeds of the life insurance. If you die after the coverage period, there are no insurance proceeds to be had. When the coverage expires, you have the option to renew the policy (buy more years of coverage) or terminate the policy (there will no longer be any insurance coverage provided by this particular policy).

Term Life insurance is temporary coverage. This type of product is considered temporary – as it only provides coverage for a specified number of years.

Term life insurance is a no cash value policy. There is no cash value that accumulates during the life of the policy. This means that once the policy expires, the Insured will not expect to get anything from the policy. The premiums he pays is strictly for the coverage within the policy period. Also, if you are not able to pay your premiums within the life of the policy, the policy will simply lapse since there are no cash values to use to pay for the policy.

Term life insurance is cheaper coverage. Precisely because of the two reasons above, term life insurance is cheaper as compared to permanent or cash value insurance policies. It is important to note, however, premiums may be subject to review regularly and that premiums may increase due to changes in age, health condition and other factors. This means that as you age, the premiums for term life will be more expensive. You can also opt for level term life insurance, which will guarantee the same premiums for the entire life of the policy. However, if you opt to renew or extend the coverage, the insurance company will underwrite the policy and may or may not change the premiums.

Who should get term life insurance?

• Those who need to cover a debt. Those who have a mortgage can consider getting term life insurance so that loved ones will have the means to pay off the debt even with the loss of the household’s breadwinner.

• Those who are recently married or who have young children. A young family that’s just starting out usually has a higher level of debt (a mortgage just taken out, still paying off college loans, working at a lower level position). Savings may also be small (or even non-existent). This means that a family is left vulnerable at the death of a bread winner. Term life insurance offers affordable protection for the young family. You can program the coverage so that it only provides cover while the children are dependents. Once they have become financially independent, your insurance needs may decrease.

• Those who want insurance but want to invest more aggressively. There are some who subscribe to the idea of “buy term, invest the difference”. The notion is that although insurance provides reasonable returns, there are still other investment options out there that provide higher returns. Thus, for someone who wants life insurance coverage but still have the freedom to invest his money the way he wants to, term life insurance is ideal.

Kinds of Term Life Insurance

• Annual renewable term insurance. This provides coverage for a year and you have the option to renew for another year when the coverage expires. Premiums are also reviewed annually and the insurance company may require underwriting and medical examinations as part of the process. There are some versions of this that guarantees reinsurability – meaning, you can still renew the coverage, but there may be changes in the premiums.

• Level term life insurance. This insurance product provides guaranteed premiums for the life of the policy. Some level term life insurance policies give you the option to renew the coverage. However, renewal is not guaranteed as the insurance company may reserve the right to deny the coverage (which will be the case if the Insured turns out to be in poor health).

• Decreasing life insurance. This type of insurance is commonly used to cover debt. As debt is paid off, you will need less and less insurance to cover the debt. For instance, if you pay your mortgage amortizations over the years, your level of debt will also decrease over the years.

• Increasing life insurance. This type of insurance is for those who are concerned about inflation and how it will affect the future proceeds of life insurance. The sum insured is programmed to increase by a certain amount or percentage.

Convertibility Option

Some term life insurance policies have the option to be converted into a permanent life insurance policy. This allows someone to afford a reasonable amount of cover for an affordable price by getting term life insurance at the onset. And later on, when he has the means to pay for it, he has the option of converting into a permanent life insurance policy. The advantage of a convertibility option is that conversion is guaranteed without the Insurer needing to show proof of insurability (i.e. undergo a medical exam, etc.).

Conversion is something you should consider since term life insurance is only for those who have temporary insurance needs. If you are on the lookout for permanent insurance that also provides cash value build ups, term life insurance can just be a stepping stone.

The Cost of Term Life Insurance

Like other life insurance products, term life insurance is based on the following:

• Amount of life insurance
• Your age and gender
• Family medical history
• Your health condition (including weight, height, blood pressure, blood cholesterol, etc.)
• Occupation and avocation (hobbies)
• Whether you smoke or not

Riders you can include in your term life insurance policy

Although a term life insurance policy is a simple type of product, you can add riders to strengthen your coverage. You can opt for:

• Accelerated death benefit rider. This provides a portion of the sum insured once the person is diagnosed as terminally ill. This allows the Insured to have access to funds to pay for treatments. Upon the death of the insured, the beneficiaries will receive the remaining balance of the sum insured.

• Accidental Death and Disability Benefit. This will pay an additional amount (usually the same as the sum insured) if the Insured dies of an accident.

• Critical Illness Benefit. This provides a lump sum (separate from the sum insured) in the event that the Insured is diagnosed with a covered critical illness.

• Return of Premium Benefit. This provides a refund of premiums paid at the end of the policy coverage period.

• Waiver of Premiums Benefit. In the event that you get disabled or sick (or any criteria stipulated in the contract), premiums are waived. The number of premium payments waived depends on your condition. For example, if the waiver is based on disability, the premiums will only be waived for as long as you are disabled. Once you recover, premiums will again be charged to the Insured.

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