The Beginner’s Guide to Term Life Insurance

May 21, 2019

Term life insurance provides financial protection to your chosen beneficiary in the event you pass away. Having this insurance can make all the difference if tragedy were to strike – and getting a policy is much easier than you might expect. Read on to learn more about term life insurance and how it can protect your loved ones.

What is term life insurance?

Term life insurance is a life insurance policy for a specified term. You choose a term length that suits your needs (usually somewhere from 10-30 years) and if you die while the policy is in force, the insurance company will provide a death benefit to your beneficiary.

Once you qualify for coverage, you pay the insurance company a small amount (the policy premium) on a regular basis. If you pass away while the policy is in effect, then the beneficiary of your policy receives a lump sum.

Your chosen beneficiary can use this lump sum for pretty much anything: mortgage payments, burial expenses, college tuition, living expenses for loved ones or other outstanding payments. If the policy term ends while you are still living, you and the company both part ways.

The biggest benefits of term life include affordability and the ability to select a term that makes sense for your lifestyle. You may need this coverage while your children are young and rely on you for support, but this policy might not be as useful later in life. With term life, you can select the term length that benefits you and your loved ones.

How much does term life insurance cost?

Term life insurance is one of the most affordable types of life insurance you can buy. Your premium will be based on your age and health at the time you apply for coverage. Non-smokers in good health will typically pay lower premiums.

For a 25-year-old non-smoker male in excellent health, a 1-million-dollar policy for a 30-year term would cost about $80/month. A traditional whole life policy for the same individual would cost around $250/month. This example is simply an estimate, as your individual rate will be based on factors personal to your age, health and lifestyle.

Generally, you will pay a higher premium for a 30+ year term length, because the likelihood of payout for the insurance company increases with the length of the policy term.

How to choose the right term length

In general, your term life insurance coverage should last for the entire span of time that you have dependents who rely on you for housing, financial support, etc. Term life insurance is offered for various periods of time, usually ranging from 10-30 years. You can customize the length of your policy to match your budget and comfort level for when you predict to no longer need coverage.

When choosing a term length, consider:

  • Your family and dependents: many people buy term life to ensure their children are financially protected through childhood. If this makes sense for you, then choose a term length that covers the amount of time you want to support your children.
  • Your health and age: most people who are generally healthy will qualify for coverage, and in many cases, you will not need to undergo a medical exam to qualify.
  • Your coverage through work/spouse’s coverage: even though you or your spouse might have coverage through work, this might not be enough coverage to support your family in the event of tragedy. Even more, if you were to switch jobs, this policy might not come with you.

Will I need a medical exam?

For many term life policies, you don’t need a physical exam to qualify for coverage. This simplified process makes it much easier to get coverage quickly.

According to a 2019 study by LIMRA and Life Happens, nearly two-thirds of people who are interested in purchasing life insurance through simplified underwriting are drawn to the speed and ease that it offers. The simplified process of qualifying for term life insurance is one of many benefits of this type of coverage.

Life insurance isn’t just for breadwinners

Life insurance isn’t just for the head of household or a small business owner. If you have anyone who depends on you for financial support, then you should consider getting a life insurance policy. And even if your spouse has a great life insurance policy, this coverage might not be enough to support your family in the event of a tragedy.

What happens if I outlive my term life insurance?

At the end of your term, your coverage will end and your payments to the insurance company are complete. When you outlive your term life insurance, you will no longer be covered if you pass away. However, if you want to continue coverage, you can convert the policy to a permanent one.

If you want more flexibility, you can also consider return of premium life insurance . With return of premium, you will pay more in premiums, but when the policy expires, you can receive the amount you paid into the policy in full.

Find the right price - connect with a Symmetry Financial Group licensed agent

One of the biggest challenges when it comes to life insurance is finding a premium that fits comfortably into your monthly budget. That’s where your Symmetry Financial Group agent can help – with access to over 30 of the top carriers, your agent can shop around for you to find the best term life policy for your needs.

Having a trusted agent to present policy options saves you the hassle of research, phone calls, and checking price tags all over the internet. To learn more about term life insurance fit for your budget, request a quote for term life insurance today! There is no better time than now to get term life insurance. Let’s get started!

 
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