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Term Life Insurance

Term life insurance is called "term" because it provides coverage for a specific period or term (most often 1, 5, 10, 15 or 20 years). For this reason, it is also called "temporary" insurance. If death occurs during the term, the policy pays cash benefits to the beneficiary. However, once the term is over, and if the policy is not renewed, the coverage ceases. If death occurs after te coverage ceases, no cash benefits are paid out.
Term insurance is the most straightforward type of life insurance and the easiest to understand. Sometimes it is called "pure" insurance, since the policy has no financial investment value and most of your premium goes to pay for coverage, with only a small amount used to pay the insurance company's costs. If you are looking for the maximum amount of coverage for your dollar, term life insurance will give you the most bang for your buck.

 

Tips For Term Life Insurance
 
  • Get more than one independent life insurance agent to help you, then choose between them. They will reduce your shopping time, help you with the application and keep each other honest
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  • 90% of all term life plans are canceled. Make sure that you can handle life insurance premium payments
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  • Sign the life insurance application after you answer the questions completely. If you are younger and healthy, the company may not require doctors records
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  • If you are older and have a medical history or want a substantial amoutn of life insurance, the company will almost certainly require your doctors records
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  • Read your policy when it arrives. You have usually a 30 day right of refusal if you find something you didn't know about in the application.
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  • Discuss what your plan is at the tend of the term policy with your agent, if you are going to renew or convert to a whole life product. Also find out how much it will be to increase the face amount
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  • Cancel your old life insurance policy only after you have been approved by a new company. Term life rates have trended down, so it might benefit you, especially if you stoped smoking and the old company won't reconsider your premium.

  • How term life insurance works
    Any life insurance policy that covers you for a specific, predetermined amount of time is a term policy. Should you die during your policy's term, your beneficiaries will receive the payment - should the policy expire before you do, there is no pay out.
    Term policies are only insurance; they have no cash value or added savings feature.However, during the life of the policy, you may be able to secure loans using death benefit as collateral. Any such use of your policy will, however, diminish the death benefit until the loan plus interest is repaid.
    Term life insurance policies are popular among consumers because of their affordability and flexibility. With a term life insurance policy, you choose the amount and duration of your policy's coverage.
    Insurers typically offer term policies in increments of 5 years, up to a maximum of 30 years. Some insurers also offer annually renewable one-year policies.
    Term policies usually feature a fully guaranteed rate that will not change over the life of the policy, but some policies may feature variable rates in return for lower premiums.
    Insurers almost always require a medical exam for any type of life insurance. Some insurers will allow a policyholder to renew an expiring policy without benefit of a new exam, but this is not always the case. Most insurers will not extend a new term life insurance policy to applicants who are 70 or older.

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