What is Term Life Insurance?
A term life insurance policy covers the policyholder for a specific amount of time, which is known as the term. The term lengths vary according to what the individual chooses. Terms typically range from 10 to 30 years and increase in 5-year increments, providing level term life insurance. Among the most popular life insurance products available, term life insurance policies tend to be more affordable. They typically provide an amount of coverage for much less than permanent types of life insurance. Speak to an agent toady about a term life insurance policy that’s right for your situation, and get your personalized term life insurance quote.
How Does Term Life Insurance Work?
Depending on the type of policy, term life insurance can offer fixed premiums for the entire term or life insurance on level terms. The death benefits can be fixed as well. Because it’s affordable and the payments can stay the same, term life insurance policies are popular with young people just starting out, families and people who want protection for a specific period of time. (For example, someone who wants to protect an income until retirement or while paying off a home mortgage.)
Term life insurance doesn’t accrue cash value like several other types of life insurance, but with many term policies, beneficiaries do receive the full face amount. For example, if a policy’s face amount is $100,000, the beneficiary receives the full amount, pure and simple. Even better, the benefits paid by on a term life insurance policy are tax free, according to current tax laws.
There are several types of term life insurance policies available through AIG Direct, including level, renewable and convertible. Get your free, no obligation, term life insurance quote today.
Level Term Life Insurance
One of the most popular types of term life insurance, level term life insurance (or term level life insurance) available through many life insurance companies, offers life insurance on level terms or a fixed premium payment for the duration of the term. It also has a fixed benefit amount and the terms range from 10 to 30 years. A longer term could mean a higher monthly premium, because the carrier typically averages the cost of insuring someone who is younger with the cost of insuring someone who is older (when premiums are more expensive). Because level term life insurance has a “set it and forget it” fixed payment, it can be easier for people to budget. Having a fixed benefit that pays the face amount also holds appeal as straightforward, “pure” insurance.
Convertible Term Life Insurance
Flexible and affordable, convertible term life insurance available through AIG Direct can be “a valuable benefit” for some. This type of insurance allows people to convert their term life insurance into a permanent life policy, without a medical exam or the need to prove insurability. The premiums can be lower than a standard term life policy, so it often appeals to young people and families on a budget. As time goes on, policyholders may need more coverage, or they might decide a policy with a cash value makes more sense. Having the ability to convert the policy offers nice flexibility as needs or financial goals change. There are two things to be mindful of with a convertible policy. First, when you convert to a permanent life insurance policy, the premium increases. Second, there is typically a window during which you can convert. The ability to convert does not run for the entire term, so it’s wise to watch for the deadline.
How to Apply for Term Life Insurance
You can get started by requesting a term life insuarnce quote. A nationally licensed agents will help you answer your questions and find the right term life insurance policy for you and your family.