Term Life Insurance

Buying Term Life Insurance

There are three major types of Term Life Insurance:
• Level Term -- Provides a death benefit that stays the same over the period. For example, A 5-year level term policy with $10,000 in coverage means the company will pay $10,000 if you die any time during the 5 years the policy is in effect. Premiums normally stay the same ("level") during the term.
• Decreasing Term -- Provides a death benefit that decreases over the term in a specified manner. For example, The benefit during the first year of a 5-year decreasing term policy may be $10,000, and decrease by $2,000 every year. At the end of the fifth year, the face value is zero and coverage expires. Premiums for decreasing term usually remain level throughout the term.
• Increasing Term -- Provides a death benefit that increases over the term in a specified manner. For example: The benefit for a 5-year increasing term policy may have a face amount that starts at $10,000 and then increases 5% every policy anniversary date. Or the coverage may be tied to increases in the cost of living as measured by a standard index. Premiums usually increase with the coverage in this type of policy.

Features of Term Life Insurance

Renewable Term Life Insurance

Convertible Term Life Insurance

Premiums for Term Life Insurance

There are four kinds of common payment patterns with term life insurance:
• Level -- the dollar amount of your premium remains the same throughout the term.
• Increasing -- the premium increases by a set dollar amount after a set number of years, as specified in the contract.
• Level / Increasing -- the premium is level for a specific period, then increases by a set amount annually.
• Indeterminate -- two premium rates are established — a guaranteed maximum, and a lower rate you actually pay... the lower premium is level for a specific period of time... after that period the company establishes a new rate that may be higher or lower than the initial premium... but the premium you pay can never be more than the guaranteed maximum rate.

Term Life Insurance Quotes Online

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The Web has greatly affected the insurance industry, making insurance shopping much more efficient by giving the consumer more choices than what could be found in local phone books. Consumers are now linked directly to hundreds of insurance companies via the Internet, making the tasks of obtaining insurance rate quotes faster and easier. Increasingly, smart shoppers are obtaining insurance quotes from the insurance company's website, and even applying online to purchase insurance policies. Comparing term life insurance quotes online gives the consumer an easier and faster way to select a policy at the best price, 24 hours a day, 7 days a week.

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Term Life Insurance FYI

Term life insurance policies are the least costly. They pay death benefits only, which means they have no cash value if you decide to stop making payments. As the word "term" suggests, these policies are in effect for a specific period of time -- a year or until you reach a certain age are common.

• Term Life Insurance is named for the contract's limited length or "term".
• Term insurance usually has no cash value.
• Term policies generally last for 1, 5, 10, 15, or 20 years, or to some specified age such as age 65 or age 100.
• If you die during the term, the insurance company will pay the death benefit.
• If you don't die during the term, no benefits will be paid — you may be able to renew the contract at the end of the term, or you'll need to buy another policy.
• Term life insurance is a great choice for people who have a limited budget but still want to purchase life insurance coverage.

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Term Life Insurance Tip

If you want insurance protection only, and not a savings and investment product, buy a term life insurance policy, instead of a whole life insurance policy.