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There are insurance options that are not popularly known to the public.


Term life insurance is one of them.


Most people are unaware of its benefits or how and when to use it.  


If that’s you, it’s Okay that’s what I’m here to show you in a way that’s easy to understand so you aren’t flying blind. 

What is Term Life Insurance?

Let’s start with what Term Life Insurance is.


If you notice the word Term is what makes this life insurance policy different from the others.  

In plain terms, this life insurance type is good for a finite Term; hence Term Life.

What Determines the Term it's assigned to?


One very important thing to remember that will save you from making a big mistake with term life insurance is understanding this:


You will eventually have to lose the policy if you outlive the term.


Also, understand that according to Minnesota.gov that most companies will not allow you to set the term past your 80th birthday.

In other words, it’s a delicate policy.


It’s meant to be specific and the insurance company isn’t in business to lose money. 


Are you starting to get the picture?


Great. Let’s move on.


So, how does one choose a term?


What type of dynamic should you have for Term life insurance?

  • If you know, due to terminal illness when the end of life may arrive.
  • If you want to secure a benefactor’s financial safety by choosing a term that the insured is likely to pass away.

Types of Term Life Insurance

  • Level Term

Not the premium or the death benefit changes over time. 

  • Decreasing Term

Premium and death benefit decreases over time.

There are only really 2 types stated above.


The myriad of ‘types’ shown elsewhere is a confusing hodge podge of riders and other types of add ons. 


But, to make things simple I have named the two. In the chart below you’ll see how they use common sense and some medical and lifestyle information as well as age and gender to figure out what is going to be affected. 

Annual Renewable Term Life

Age

 Male (non-smoker)

Male (smoker)

Female (non-smoker)

Female (smoker)

18-34

$21

$40

$15

$30

35-39

$23

$53

$16

$37

40-44

$33

$82

$21

$54

45-49

$49

$113

$29

$79

50-54

$77

$182

$49

$123

55-59

$116

$281

$74

$181

60-64

$178

$412

$108

$271

65-69

$307

$721

$183

$432

70-74

$518

$1,189

$313

$769

75-79

$864

$1,898

$513

$1,198

The many facets and conditions of Term life insurance. 


It’s important that you speak to a live agent.


This is not the type of insurance you buy online without questions asked. 


In some cases, depending on the insurer, you won’t be able to buy it online. This is a good thing and here’s why.

  • Some Term life insurance policies are renewable. The amount of time you can renew it for varies. The most common length is 5 years at a time.
  • The premium could rise during the renewal period.
  • Some policies may be converted to a permanent type policy. It may or may not change the premium. Some policies have the promise to forfeit that built in. Do ask the agent you work with if this is true of your policy before you actually sign on it.
  • There is no refund for an unused policy. Unless a rider is purchased. 
  • The policy eligibility and renewal can be contingent on the health and age of the insured.

I strongly suggest that you have the option to convert if all the other elements of the policy are the right fit.  Why? Because it will safeguard you and your benefactor should you live past the time of the policy. At least you won’t lose  the whole policy and all that you put into it. 


But, there are always stipulations and not every insurer will allow conversion. So, again, make sure you are asking all the questions you need to. On the brighter side, some insurers won’t ask you to be re-qualified for the policy. Don’t assume though, this is a deal breaker so ask.

What Does Term Life Insurance Cover?

Term Life insurance, as I’ve addressed, is a plan that pays a death benefit if the insured passes away while the Term life insurance is in place.


This is not an insurance policy like car or health insurance.


There’s nothing to cover or not. 

It’s money that is kept out of reach until a death benefit is paid.


So, though there is no interest gained like in other investments, the benefactor  or you if you have a returned premium rider can use it for anything you need it for.

What Term Life Insurance Doesn't Cover?

So why cover what it doesn’t cover in this case? Simple.


I want you to get a full picture of not so much what it doesn’t cover but what you can’t or shouldn’t use it for.

  1. It’s not a savings account. Sure, you can save money in it but again, at no interest there may be no point.

  2. If you have a reason to keep money from your hands for an extended period of time as a form of discipline then go for it.

Recap of Things to Remember:

  1. You must have a premium return rider to collect the premium payments back.

  2. You lose the payments and policy if you outlive the policy without the rider.

  3. You can leave your money to a charity of your choice. 

I think you have an idea of what a Term life insurance really is. It’s quite simple and has a specific function.

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Term vs. Whole

Policy Features

Term Life

Whole Life

You choose policy length

Cell

Provides life long coverage

Cell

Premium stays same for policy duration

Lower premiums

Cell

Death benefit remains level

Cell

Accumulates cash value that can be borrowed from

Cell

Policy receives dividend payments

Cell

How You Can Use Term Life Insurance

I’ve added an extra section here to help assist you in making a decision regarding what you could use a Term life insurance policy for.

Funeral Expenses

This is an expense that everyone will face. Since you won’t be around to deal with it yourself, your loved ones will appreciate it all being paid for.


A term life insurance policy put carefully in place will do this.


Please remember that if you’re young enough to discuss the policy payback rider and also the renewal of terms.


Do all that you have to not to let it lapse.

Long-Term Care

Whether you have long-term-care insurance or not, it helps to have it behind you for a supplement.


The way things are going in this world, none of us know where Social Security insurance will be and we need a bit of padding for later.


Just watch those expiry and renewal dates otherwise it will all be for naught.

Cosigned Debt

Ah yes the fated credit card debt that’s still very much alive after you aren’t.


Their portion and your portion is now in the cosigner’s hands.


Help your cosigners be free of extra debt, after all they took a risk in helping you thrive, pay them back with some safety if something should happen to you.

Leaving a Legacy

When you leave a legacy to your next of kin you are giving them something to remember you by.


You may also be helping them get started in life or paying for college education.


A legacy is as worthy an action as any of the other more practical or specific reasons.

Regular Household Bills

If something should happen to you how will your spouse or even adult children deal with this?


It’s a wonderful and appreciative way to use Term life insurance.

Paying off a Mortgage

You can insure your family can still pay the mortgage.


You can also save it for your own mortgage or any future purchase if you time it all correctly with the suggestions and education given in this guide.

Child Care

If you should pass, the kids will still need care.


This is one of the most expensive bills that one has. You can provide that safety net.

How Much Does Term Life Insurance Cost?

(Find out how much your insurance will cost with the calculator below:)

As you can tell from the chart below, this type of insurance is a lot more affordable than the other types of insurance.


This is because of the nature of this type.


Whole life insurance is more expensive because it covers your whole life.


This policy is for a set time period. 

Age

$250,000

$500,000

$750,000

$1,000,000

25

$17.48

$27.66

$38.87

$46.15

35

$19.05

$30.67

$43.30

$52.16

45

$35.54

$60.88

$88.70

$113.03

55

$85.75

$153.96

$225.24

$289.64

Pros & Cons

Pros

  • It’s the most Affordable Life Insurance Option
  • Lasts for a set period of time so you never pay for more than what you need.
  • Provides enough financial assistance to pay off debts, and cover the important milestones in life.

Cons

  • Coverage Is for a Limited Time
  • Apart from a premium payback rider, there is no cash value option
  • You could outlive the policy and lose it.

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Who Needs Term life insurance?

Best Age to Get Life Insurance

As far as who needs Term life insurance I can honestly say that anyone and everyone can use it.


The whole point that i’m trying to drive home with Term life insurance is the care it takes in the planning.


Anyone can use it and it’s a beneficial thing but must be done correctly. I can’t reiterate that enough. 

Faq's

Can you get any refund if you cancel your Term life insurance?

What is a Return of Premium Insurance Policy?

Is Term Life Insurance Taxable?

What questions do I need to ask prior to purchasing any rider?:

How much term life insurance do I need?

Is Term Life Insurance an Asset?

How to Apply for Term Life Insurance

The application process is simple enough. The information you need  is important.

1.

Beneficiary Information, disbursement and backups: The administrative things you’ll need for each beneficiary are the names, birthdates and social security numbers. Beyond that you must make sure you know exactly the amount you will want to disperse to each beneficiary. Yes, you can give whatever percentage per person that you wish if there are more than one person.

2.

Payment Schedule: This one is easy enough but be sure about the answer. This way you can set it and forget it. Make sure you can make the payments in the schedule you have chosen. You have several choices here.

  • Single payment 
  • Annually,
  • Semi-annually,
  • Quarterly and monthly
3.

Other Policies you Hold: They will want to know how much you hold in other insurance plans as well as why you are applying for multiple policies.

4.

Criminal Record or Misdemeanors: In the last 5 years typically they’ll want to know this history. This is risk factor determination. 

5.

Future Adventures: This takes honesty and you need to be. Due to the fact that they are insuring you for life, they don’t want to push it. In other words, it is a Term life policy for a shorter period. If you intend on climbing Everest at that time, you may not get the policy. If you don’t tell them and you die doing this activity or something as risky then your benefactors won’t get paid. 

6.

Family Health History: Your family health history can impact your life. They will want to know if you are related to anyone in the immediate family with certain issues. Parents and siblings are scrutinized.

Is Term Life Insurance Worth It?

I think so. Why? Because it’s a shorter term commitment that can make a lot of people very happy.


We take our finances for granted. 

We don’t always realize what it takes to make dreams come true or to safeguard our loved ones.


I personally believe that there is a lot of value, when done properly in a Term life insurance policy. 

In conclusion, I strongly recommend a policy for those that are starting to build a life.


Term life does help to safeguard those around you and serves as a protective shield to others. 


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