Term Life Insurance: Reasons Term Insurance is a Good Fit

If you’ve been reading our blog for a while, you know there are two types of life insurance: term life and whole life. Sure there are more names for life insurance policies, like graded death benefit policies or flexible whole life, but all the bells and whistles aside life insurance is always either term life or whole life.

Here we’re going to look closely at term life, and identify those times in your life you might love a term policy. Remember, you can have as many life insurance policies as you like!

Term Life Insurance Basics

Term means time. When you sign a contract with an insurer, they are guaranteeing to pay your beneficiary X amount of money, in return for your payment (premium). As long as you make your payments on time, and you were honest with the insurance company about your health, age, and tobacco status, you’ll have a happy relationship with your insurer.

Here are some other key points about Term policies:

• Term life insurance policies are good for a set amount of time. It can be five years, ten years, even thirty.
• They don’t build cash value. That’s whole life.
• The premiums are very low. You’ll get a lot of coverage for your premium.
• Your rates depend on your age, health and tobacco status.
• Males and females pay different rates.
• Insurance companies aren’t allowed to discriminate based on your race or religious preferences.
• Some term policies offer “double indemnity” or “accidental death” benefits. In short, these policies will pay more if you die in an accident.

Who is a Great Candidate for Term Life Insurance?

Anyone who wants life insurance! Examples of an excellent fit for term life are:

• Young, single parents who worry about what will happen to their children if they pass in an accident.
• Anyone who makes a mortgage payment, and would like the home paid off if they die.
• Folks who worry about how their children would afford college, or how their loved ones would survive if they died in an accident.
• Anyone who needs more coverage but is aware of a tight budget.

If you lay awake at night wondering what will happen to your family if you pass away, term life insurance will put those fears to rest for years. If you wonder what might happen to YOU if the breadwinner in your family dies, term life insurance will quash those worries.

Can I Have a Term Life Insurance Policy if I Have a Whole Life Policy Already or Other Term Policies?

Absolutely! Many people choose to have a whole life policy (which is more of a long term investment), a few term life policies to pay the mortgage and raise the children, and other additional life insurance policies as needed.

Can the Insurance Company Cancel My Policy if I Get Sick?

As long as you pay your bill on time and you were completely honest on your application, they cannot cancel your policy during the term.

• If you’re diagnosed with a serious illness during your contract, the company cannot change the contract.
• However, when your term is up (five years, ten years etc) the contract is over.
• They may offer you another term policy with higher prices, because you’re no longer healthy, or they may choose not to insure you.

If you’re young and healthy, and your family has a history of illness, you might want to consider a whole life policy too. These policies will last your entire life, and the insurer cannot cancel them later if you get sick. They may seem more expensive now, but when you’re older you’ll be happy made the investment.

Remember, you can have as many life insurance policies as you like!

Contact us today if you need to learn more about term life insurance. Our licensed agents at InsureYourHome.com are ready to help!