What Term Period Is Right For Me?

There are many reasons for purchasing term life insurance. Each life insurance policy is for a specific length of time (term period) that would be best for you. To help with this, here are several examples where different times might apply.  Please don't hesitate to ask our licensed online specialist if you need any further help.

5 Year

Generally speaking, the more specific the need for insurance is, the shorter the term  period tends to be. For example, if you have a child going to college for four years and no  need for the insurance thereafter, a five-year term may be perfect for you. Another example  of the need for a five-year term period would be to protect a short-term loan.

10 Year

Let us say that you are a business owner, and you have a key employee that you wish to cover  with life insurance. If you don't expect the employee to stay in the same position for more  than 10 years, a 10-year term policy may be ideal.

15 Year

Many families choose 15-year term policies to replace one or both of the parents' income(s)  in the event of death. This allows the surviving family members to use the death benefit as  a replacement source of income. This is especially useful where the children will be  self-supporting before the 15-year term has expired, or the home carries only a 15-year  mortgage.

20 Year

This is a very common choice among people seeking longer-term coverage because of the  cost-effective nature of the premiums. For example, over 20-years the total premium on a  20-year policy generally costs much less than purchasing a 10-year policy and then keeping  the same 10-year policy for an additional 10 years. If you have young children at home, a  20-year term policy could be the perfect choice for seeing them through their college years.

30 Year

Mortgage protection is good reason for a 30-year term policy. If you have a 30-year  mortgage, you can take out a life insurance policy that will cover the entire period. This  will remove any stress you might otherwise feel about leaving your family a financial  burden instead of a home that is free and clear. One thing you might want to consider when  buying a 30-year term policy is that the rates are higher due to recent legislation.

What is the difference between a guaranteed premium and a non-guaranteed premium? The term insurance quotes we offer come with two types of premium provisions: guaranteed or non-guaranteed.

The first allows you to choose a term period of 5, 10, 15, 20 or 30  years. During this term, the premium is guaranteed to not increase or decrease.

The second, less expensive one also allows you to choose from the same term periods of five,  10, 15, 20 or 30 years. However, unlike the guaranteed level premium policies, the premium  is subject to change before the term of the policy expires. For example, you may have a  20-year term policy where the rates are projected to remain level for 20 years, but are  guaranteed for only 10 years. You should be aware of these provisions before buying such a  policy.

What do I do when my term period is finished? When trying to decide which term period is right for you it is important to know your  options. You can always apply for a new term insurance policy after your term is through.  At the end of your policy, the insurance company will contact you to tell you that the  policy is about to expire. At this point, you have three options.

Option 1- New policy depending on your age and health, you can apply for a brand new policy  with either your existing company or a new company. The new policy will simply replace the  former policy. You must be careful when doing this because new underwriting requirements  must be met with a new policy. Be sure to keep your old policy in force until you know the  outcome of your new application. If your health has deteriorated, you might face extremely  high premiums, or even worse you might be refused coverage.

Option 2- Keep your existing policy- If you know your health is bad, you can continue  paying on the existing policy after it expires. It will automatically continue as an  extension of your existing policy. The good part about continuing a policy is that you will  not need to provide medical evidence of your insurability. The downfall with this option is  that the policy typically becomes annually renewable. This means that each year after the  guaranteed term period has finished, the premiums will begin to increase substantially  every year.

Option 3- Convert to a Permanent Policy- You can convert your policy to a Permanent Life  Insurance policy and lock in your premiums at a higher level for the rest of your life.

I know what plan I want, what else do I have to do?

The next thing that is required is a  paramedical exam. Most companies perform the same routine exam, which consists of a blood  sample, a urine sample, your height and weight, a blood pressure reading, and the answers  to several questions about your health. Depending upon your age and the amount applied for, other tests, such as an EKG may be required as well. You may be examined either at your home or alternatively, at the office of the paramedical facility, but most people schedule it at their home.  It  usually only takes about 30 minutes.