Term Life Insurance! What is it?

What Is Term Life Insurance?

Term life insurance is a type of life insurance that guarantees payment if the covered person dies during a specified term. Once the term expires, depending on the company and coverage, the policyholder can either renew it for another term, convert the policy to permanent coverage, or allow the policy to terminate. Term life insurance provides a death benefit, but typically no cash value whereas whole life insurance has a cash value that accumulates over time and creates an asset which may be used during your lifetime.

How Term Life Insurance Works

The insurance provider calculates the premiums when you purchase a term life insurance policy based on the payout amount on the policy as well as the age, gender, and health of the named insured. A medical assessment may be required in some cases. You might also be asked about your driving record, prescription drugs, smoking status, profession, interests and family background by the insurance provider.

If you pass away within the insurance term, the insurer will pay the beneficiaries the payout value of the policy. This cash benefit, which in most cases is not taxed, can be used by beneficiaries to pay for any hospital or funeral expenses, personal loans, or mortgage debt. If the policy expires before your death, there is no payout.  It is possible to extend a term contract at the expiration, but the premiums may be recalculated with your age at the time of renewal.

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Term Life Insurance Explained

Because this coverage offers a protection for a limited period and includes only a death payout, term life is typically the more affordable option. The overall risk to the insurer is lower than that of a whole life policy, and most term life insurance plans expire before paying a death benefit. The reduced risk helps insurers cut premiums.

Term life insurance tends to be the least costly choice for life insurance when you assess the amount of coverage that you receive for your premium. Interest rates, the insurance company’s financials, and state laws will also impact premiums.

 

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Benefits of Term Life Insurance

For young parents, this coverage is more attractive. For relatively low premiums, they can receive a substantial amount of coverage. The substantial benefit will offset lost income if a parent dies.

For people who temporarily require unique sums of life insurance, these plans are often ideal. For instance, the policyholder will calculate that their beneficiaries may no longer require additional income support or will have accrued adequate assets to self-insure by the time the policy expires.

 

Questions? Want to learn more? Here’s 4 easy ways to reach us:

Phone: 877-994-6787
Email: insure@siaonline.com
Text: 951-482-8144
Web: www.siaonline.com

PS Here’s a few words from one client that trusts Stromsoe Insurance Agency:

“I’ve always been treated like family. Special Care is taken to make sure I’m completely satisfied. Thank you.”
David Swanberg – Crystal Clean Maintenance – Murrieta, CA – Client Since 2000

PPS Every policy is backed by our iron clad, 100% complete satisfaction guarantee. Ask for your copy today!

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