Term Life Insurance allows for a payment to be made in one lump in the event of a death. It also provides payment up to 100% of the term life insurance benefit if the insured person is medically diagnosed to be terminally ill and unlikely to survive for one year.
When it comes to a protection, Term Life Insurance is an important element of any risk planning. Your broker will explain to you, your life partner or your family exactly how term insurance works and the ins and outs
The words ‘term life insurance’ reveals that the period that someone is insured is limited (ie limited for a term or period of time). And this is generally true.
By age 100 most term life insurance policies will be terminated, although in most situations the actual cost of continuing a term life policy will become prohibitive many years prior to the life insured’s 100th birthday!
Premiums and Term Life Insurance
Premium payments for term insurance are actually worked out using various methods. The usual way is what the industry calls a ‘rate for age’ policy. This is where the premium goes up each year as you age. The other options are different ‘level’ premium policies (usually the level is set at ten yrs, level to age 65 or level to age 80).
When it comes to the ‘level’ premium policy the amount you pay is constant over the life of the term insurance policy. This is either ten years or until one hits reaches 65 or 80 years of age – dependent upon which ‘term’ you select.
One great thing about a ‘level’ policy is that they give a known and predictable cost over the term of the policy. This means that insurance cover lasts for the period of the agreement as you get older…which is often a lower-priced way to get cover.
However, the other part that needs to be considered is that is that ‘level’ policies start out at a higher premium level…and for some clients this cash flow may be better utilized for debt reduction or savings. This is why we offer free, personal and independent service…to help you understand all of the consequences so that you are always well informed.
To summarise, we all have different needs and requirements…there is no ‘cookie-cutter’ approach we can apply that will suit you the best. That’s why we usually recommend a mixture of ‘rate for age’ as well as ‘level’ term life insurance policies. This way, the ‘rate for age’ policy deals with your requirements in the short/middle term, and the ‘level’ protection that gives a longer term peace-of-mind for spouses and life partners as the years advance.
Term Life: More Advantages
A lot of term insurance policies have extra benefits that are part of the policy. These are designed to take your future circumstances into consideration. An example of this would be a ‘special events’ benefit. This will allow you to increase the level of protection and cover, but without the requirement to apply. This could include having children, marriage, divorce etc). Each insurance company has their own specific conditions in this area, and again, our free service will help you pick the term insurance policy that fits you best.
Our service as specialist term insurance advisors is to help you navigate these issues. You will still have to pay for the cost of the extra insurance but you will not be medically underwritten for it. For those who have had a change in health since they took out their initial policy this can be extremely beneficial.
G o ahead and get a term life insurance quote. It’s free and independent.
Discussing Your Term Insurance With Your Beneficiaries
