Life insurance can be an important asset for some people, providing them with a way to protect their loved ones in the event of their death. There are multiple types of life insurance that people can purchase. Of these various types, term life insurance is the least expensive and complicated, making it a very popular policy. Still, it is important for anyone interested in purchasing a life insurance policy from an experienced life insurance agency, to understand who should buy term life insurance and how such policies work when needed.

What Is Term Life Insurance?

Term life insurance provides a death benefit if the policyholder dies during the policy period;  It is the most basic of all policies. This type of policy is designed to provide protection against death during important times in a person's life; such as paying off debt, starting a new family, or other significant life moments. Term life insurance policies do not include a savings component and are only paid to beneficiaries if the policyholder dies while the policy is active.

About Term Life Insurance

There are two types of term life insurance policies, based on how they are paid and the applicable policy term. Annual Renewable Term policies are year-long policies that are renewable each year. Policy premiums primarily change based on the insured's age at renewal. Level Term policies are policies that provide coverage for a specific number of years, usually in 10 to 20-year increments. Premiums may or may not change throughout the policy period.

Term life policies are either convertible or renewable. A convertible policy can be turned into a permanent life insurance policy without additional underwriting or medical exam. A renewable policy is one that can be extended for multiple terms without additional underwriting or medical exam. Converting to a permanent policy offers many additional features over a death benefit only. Both convertible and renewable policies allow a continuation of benefits without additional medical information. Policy conversion is generally available only to policyholders under the age of 65.

Term Life Insurance Payments

When a term life insurance policy is paid, it is done in one of the following ways:

  • Level Term Coverage - With level term coverage, the death benefit is the full covered amount, regardless of when the benefit is paid. Whether the death benefit is paid in the first year or the last, the full amount is paid out. This coverage usually has an escalating premium each year throughout the policy.
  • Increasing Term Coverage - With an increasing term policy, the death benefit increases steadily each year by a designated percentage, as does the premium. A death benefit paid the first year would be at face value, while one paid during the last year of a policy would be face value plus the additional yearly percentage.
  • Decreasing Term Coverage - The opposite of increasing term coverage, a decreasing term policy pays gradually lower amounts every year of the policy. Premiums usually remain the same throughout the policy period.

Choosing the right life insurance can be confusing. Even though term life insurance tends to be the least complicated of all policies, it is important for those interested in buying life insurance to discuss their needs with an experienced life insurance agency. Based on age, health, and other important factors, an experienced life insurance agency can help their clients choose the term life insurance that is right for both them and their families!

Looking For A Life Insurance Agency In College Station?

Jones & Associates Offers A Variety of Life Insurance Policies!

Call Them Today At (979) 599-7532!

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