Things to know about term life insurance
Originally Posted On: https://www.iquanti.com/
So, you’re thinking about getting a term life insurance policy? Life insurance can give you peace of mind and can be a great way to provide your family with financial security should something happen to you. But is term life insurance the right type of policy for you? Here’s what you should know.
What is term life insurance?
Term life insurance is a straightforward type of life insurance that provides coverage for a set period of time, usually 10-30 years or up to a certain age. If the policyholder dies during the term, the beneficiaries will receive a death benefit. If the policyholder does not die during the term, the policy will expire and no death benefit will be paid out. Because there’s a good chance the policyholder won’t die during the term and the insurance company won’t have to pay out a death benefit, term life insurance tends to be more affordable than other types of life insurance.
It typically requires medical information
When applying for term life insurance, you may have to take a medical exam. These days, many policies don’t require a medical exam, but will require you to fill out a questionnaire about your health. They may ask about your height, weight, habits (such as smoking or drinking), medical history, and more. Information about your health will help the insurance company determine your risk factors and set your premium.
Premiums depend on different factors
Not everyone pays the same amount for the same policy. Your premiums will depend on several factors, including your age, health, and the length of the term. In general, the younger and healthier you are, the lower your premiums will be.
You can add riders
Most term life policies allow you to add riders. Riders are additional features that can be added to your policy for an extra cost (though some are free). For example, the Waiver of Premium Benefit is a rider that can waive your premium if you become completely disabled because of an injury or illness.
It can be a great choice for new families
Term life insurance is often recommended for young families as it is generally the most affordable type of life insurance, and you can choose a term that will cover you until your children are independent and out of the house. If you have young children, a term life insurance policy can help ensure that they will be financially taken care of if something happens to you.
You may be able to convert it to permanent life insurance
Did you know you can convert some term life policies to permanent life insurance policies? This means that if your needs change over time, you may have the option to continue to be covered without having to reapply and go through the medical exam process again, and gain the additional benefits of permanent life insurance.
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