Term Insurance
Term insurance provides protection for a specific period of time. It pays a benefit only if you die during the term. Level term products are the most popular plans purchased today. The level term can be from 10 years to 30 years. The premium and death benefit are designed to stay level during the term of the contract. The premiums can be either guaranteed or not guaranteed. When purchasing a level term life insurance policy, be sure you are aware of the guaranteed premium period. Once you have been approved, accepted the policy and placed the policy in force by paying the first payment, the insurance company is obligated to keep the policy in force as long as you keep paying the premiums.
You are not obligated to pay, but once you stop paying, the policy will lapse after a short grace period. If you need insurance beyond the term of the policy, the premium rates increase and you will probably have to provide evidence of insurability at that time.
Questions to Consider When Considering a Term Policy
- How long can I keep this policy? If you want the option to renew the policy for a specific number of years or until a certain age, what are the terms of renewal of the contract?
- Can I convert to a permanent policy? Some policies allow you to convert the policy to permanent insurance without a medical exam, regardless of your physical condition at the time of the conversion. These policies are known as "convertible term."
