Term Life Insurance

What is a Term Life Insurance?

Simple answer is: It’s a temporary and affordable protection.
It’s often used to address a temporary protection need or as a gateway to permanent insurance, such as whole life insurance. Many term life insurance products allow you to convert to a permanent product, offering lifetime coverage, as your budget permits.

The cost of term life insurance may increase over time, which makes it important to understand your protection needs throughout your life so that you purchase the product that is right for you.

It is the most simple, straightforward form of insurance you can purchase which will provide coverage for a specific period of time. It addresses a temporary protection for you need or a gateway to permanent insurance, such as whole life insurance. Most term life insurance products will allow you to convert your policy into a permanent product.

You pay very little premium (payments) monthly, or annually (if you choose to) for a certain number of years, and your family is protected for that period. During your term, as long as you make your payments, your family will be protected in case you die.

By insuring yourself, you will protect your family from the following:

  • Help provide for your family’s loss of income
  • Cover short-term debts, such as credit card balances, personal debts, etc.
  • Financially help your spouse during the child-raising years
  • Help your family to pay off a mortgage
  • If you purchase term life insurance for the purposes to cover your mortgage, in case you die, your spouse can pay off your mortgage leaving herself and your heirs with a home unencumbered by a mortgage.
  • Pay for you children’s college education
  • Start up a family business

How does term life insurance work?

You can protect your family starting from 10 years up to 30 years, depending on your age.
You can ensure yourself from as little as $50,000 to as much as you are willing and are capable to pay for. Coverage start at $50,000 and the premiums (payments) are the same for the duration of the term. Once your term expires, premiums will increase annually. Some policies are guaranteed to renew up to age 95 and are convertible to a permanent policy regardless of health, subject to age limits.

Sample diagram is based on a 30 years old, healthy, non-smoker female:

Term 10 Years 20 Years 30 Years
Coverage amount $500,000 $500,000 $500,000
Monthly Premiums $13.76 $18.06 $28.38

Return of Premium Term Life Insurance (Cash Back)

There is also type of insurance available called Return of Premium Term Life.
This insurance offers you coverage with a level premium payment for 20 or 30 years, whichever you choose, and if you outlive that premium period, all policy premiums you’ve paid will be returned to you. Coverage starts at $100,000 for 20-49 years old. Ages 50 and over can get a coverage starting $50,000. The policy is guaranteed to renew up to age 95 and is convertible to a permanent policy subject to age limits. Once past the level premium period, premiums will increase annually.

Sample diagram is based on a 30 years old, healthy, non-smoker male & female:

Get Cash Back After Insurance Expires Male Female
$250,000 20 Year Cash Back $48.53 $45.41
30 Year Cash Back $42.08 $36.24
$500,000 20 Year Cash Back $85.82 $69.58
30 Year Cash Back $69.16 $54.16

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