Term Life Insurance Plans

Are you trying to find the proper term life insurance plan for your family but don’t know where to start or what options are available? Look no further! 

We will explain term life insurance, how it works, and which plan is best for protecting your family.

Whether you already have a policy or are just getting started evaluating coverage, our informative article will help you understand all aspects of this protection.

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What is Term Life Insurance?What is Term Life Insurance?

A term life insurance contract is between you and an insurance company with a contractual obligation to pay a lump sum of money to your heirs if you die.

Term life insurance is considered pure life insurance because there is no associated cash value or investment component.

What does term life insurance cover?

Term life insurance pays a death benefit for any casualty (accident or sickness) if you die when your policy is active.

No term life insurance benefits will be paid if you die from suicide within the first two years of activating coverage.

term life insurance plansHow does term life insurance work?

When you buy a term life insurance policy, the insurance company determines the premium based on your elected term duration and death benefit.

Life insurance underwriters will look at your age, gender, health, driving record, smoking status, occupation, hobbies, and family history to determine the price you pay for coverage.

All this pertinent information is gathered during the application process, often including a medical exam to assess your health.

Once approved, the insurance company will immediately pay your heirs the policy’s tax-free death benefit if you pass away.

According to US News, your beneficiaries can elect to receive the proceeds in a lump sum or a series of payments and can spend the money in any way they choose.

what is term insuranceWhat happens when term life insurance ends?

When your policy expires, so does your protection unless you’ve opted for renewal or conversion options beforehand.

It’s important to understand what happens when your policy term ends, whether getting renewed at higher rates due to older age or being converted into permanent coverage.

Renewal: When term insurance coverage ends, most policies are renewable and can be continued yearly at an increasing cost without undergoing a new medical examination.

Conversion: An alternative approach involves converting one’s expiring term life plan into a more expensive permanent coverage.  The advantage of executing a life insurance conversion is level lifetime payments with no medical underwriting. 

term life insurance definitionTypes of Term Life Insurance Plans

If you’re unfamiliar with term life insurance, comprehending various types can help you choose the ideal coverage for your circumstances.

The most popular is level-term insurance which offers steady premiums and death benefits throughout your contract.

However, there are other options, such as decreasing, increasing, and return of premium policies on the market.

  • Level-term Life: This Basic term coverage provides guaranteed death benefits and fixed premiums for an initial period.
  • Annually Renewable Term: ART policies offer a fixed death benefit while the premium amount increases each year
  • Decreasing Term: With decreasing term coverage, the death benefits decrease over a set period while the premiums remain constant.
  • Return of Premium term: ROP term guarantees the reimbursement of all the premiums if you are alive when the term expires.

Term Life Insurance Calculator

Benefits of Term Life Insurance Term Life Insurance Benefits

Term coverage is a solid foundation to provide peace of mind in protecting your family’s financial future without breaking the bank.

You don’t have to get bogged down in indecision when selecting a reliable term life insurance plan that fits your needs.

There are many common reasons why term life can be beneficial in covering your family from financial disaster should you die prematurely.

  • Mortgage Protection: Many couples own a home and buy term insurance to cover the outstanding mortgage balance.
  • Income Protection: Married working couples need term life insurance to protect their income for their spouse until they retire.
  • College Tuition: Many people term life until their children finish college. The life insurance death benefits can provide a surviving child’s college education.
  • Divorce Decree: If you rely on your ex-spouse for financial support in the future, they must carry a divorce life insurance policy as part of your settlement agreement and name you as a beneficiary.
  • Supplement Your Existing Life Insurance: If you feel your existing group life insurance is not enough, adding a term policy is an inexpensive way to cover any gaps in your coverage.

Which Term Life Insurance is Best Comparing Term Life Insurance Plans 

We recommend purchasing a level premium term life insurance policy as it offers consistent payments and death benefits throughout your policy.

Regardless of where you are in life, it’s essential to match your insurance needs with a term duration that adequately suits your budget and lifestyle.

However, remember that different carriers have age limits that affect the available term durations at various stages of life.

term insurance life cover

How long should my term life insurance last?

We suggest locking in term rates when you are young and healthy, even if it’s longer than your anticipated needs for protection.

As we age, many medical conditions prohibit us from qualifying for best-rate classifications only available for healthy individuals.

Here are some general guidelines for choosing a term length and the maximum age you can purchase it.

10-year Term Life Plan

Since a 10-year term covers you for ten years, it is an excellent choice for people seeking the most coverage for the most reasonable cost.

A 10-year plan is ideal for short-term financial goals such as debt repayment or funding your child’s education.

Enjoy peace of mind knowing this affordable coverage can be secured until age 80. 

15-year Term Life Insurance Plan

With a 15-year term plan, middle-aged buyers like you can take control of your financial future.

Safeguard your income for your surviving spouse and enjoy the peace of mind that comes from paying off your mortgage balance.

Best of all, you can purchase this coverage from several insurers until age 75. 

20-year Term Life Plan

Lock in your rates for 20 years with this popular term plan! This plan is chosen by over 40% of term insurance buyers, according to Forbes.

A 20-year term plan is excellent for protecting your income, securing your pension, and more.

Most insurance companies offer this plan to individuals up to 70 years old.

30-year Term Insurance Plan

Do you have a family that relies on your income? Are you worried about them if something happens to you and they lose their primary breadwinner?

You can insure against this by purchasing a 30-year term life insurance policy.

You can safeguard your home with a 30-year term plan, widely sought after for mortgage protection.

Buying this plan before you reach age 55 is essential if you are interested.

40-year Term Life Insurance

Discover the power of the new 40-year term life insurance plan!

Perfect for young individuals with long-term ambitions, this specialized coverage is only available from two reputable companies: Banner and Protective Life.

Don’t miss out on this opportunity. Secure your future before reaching the age of 45. 

Cost of Term Life Insurance

Buying a term life policy is a straightforward way to guarantee financial protection for your family in the event of your passing away.

When you plan ahead and factor the cost of term life into your budget, you can ensure that those you love are cared for no matter what life brings.

It is important to consider the costs associated with getting the right coverage and it helps to do some research before making any decisions.

As you examine all of your options, here is a look at the cost of various term life insurance plans to help guide your considerations.

Term Life Insurance Plans

 $500k$750k$1mm
 10 10 10 
Age 30$16$20$22
Age 40$19$25$29
Age 50$44$64$75
 202020 
Age 30$21$27$33
Age 40$29$41$52
Age 50$73$108$142
 303030
Age 30$34$47$58
Age 40$53$76$99
Age 50$125$185$252

* The monthly term life insurance rates for non-smoking males

Take notice of how much less you will pay for term life insurance at age 30 than if you wait until age 50 to buy coverage.
 
Locking in longer-term lengths at older ages increases the cost substantially because your coverage goes further into your life expectancy.
 
Plus, our chances of dying increase each year, producing higher life insurance rates as we age.
 

You could save money by having two separate term insurance policies staggered in length to match specific protection needs.

Laddering term insurance is best when you have various needs that do not require the total coverage amount under one longer-duration policy.

The overall cost will be much less because some of your coverage will end as your needs decrease over time.

Meanwhile, utilize our free life insurance calculator to compare quotes from many top life insurance companies in minutes.

term life insurance explained

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best term life insurance plan

How Much Term Insurance Do I Need?

Now that you understand the different term life plans available, you should evaluate the amount of coverage you need to buy.

The amount of insurance you need will depend on your current financial situation and the lifestyle you want your family to have if you should die.

The industry has many term life insurance calculators that assist buyers in finding the optimal amount of coverage based on their circumstances.

A simple rule of thumb would be selecting a death benefit equal to a multiple of your annual wages.

Buying ten times your annual income in life insurance is a typical way of calculating your required life insurance coverage. 

Purchasing a life insurance amount worth ten times your earnings can assist your family in covering your income, paying off debts, and protecting your mortgage.

Insurers have a maximum death benefit you can purchase, derived by multiplying your income by a factor determined by each insurance company. 

How much Term life insurance can you buy?

Ages < 40Annual income x 30
Ages 41 – 50Annual income x 25
Ages 51 – 60Annual income x 20
Ages 61 – 70Annual income x 15

50000 Life Insurance Policy Tips for Buying Term Life Insurance

Now that you know what to look for in a term life insurance policy, it’s time to start shopping around. 

It’s essential to compare rates from different insurers when evaluating coverage, as they can vary significantly.

Shopping with an independent agent is imperative for applicants with medical problems because your health is significant in pricing your coverage.

You should also ensure that the coverage amount is adequate for your needs and that the insurer has a good reputation.

When searching for term life insurance, consider policy riders that are included or can be added to your coverage.

Many companies offer an accelerated death benefit rider that allows you to access your death benefit while alive if you become terminally ill. 

Your policy should always include a conversion privilege allowing you to convert your term plan into a permanent one.

Some insurers do not allow conversions and only permit renewing coverage, but the cost can be so exorbitant that you will be forced to cancel coverage.

It’s highly recommended to buy the lengthiest term plan you can afford from the beginning rather than count on the renewal option in the future.

If you need assistance finding the best term insurance plan, do not hesitate to call us.

How Does Term Life Insurance Work?FAQs: How Does Term Life Insurance Work?

What is the main disadvantage of term life insurance? Term life is temporary coverage that does not build cash values when your term expires, or you cancel your policy. If you cancel or outlive your policy, the insurance company will keep your money since no death benefit is paid.

Can you cash out a term life insurance? It is impossible to cash out a term life insurance policy as these policies do not accrue any cash value over their specified coverage period. However, specific term policies may offer the option to convert into a permanent policy that does provide cash values.

Do you get money back after a term life insurance policy? No, regular-term life insurance policies do not refund premiums if you survive the policy term. Only specific policies, such as “return-of-premium” plans, offer this feature.

Can older seniors buy term life? Insurance companies typically have an upper age limit for term policies, usually around age 80. Most seniors are better off buying permanent coverage. 

Trending Life Insurance Topics 

  • Affordable Life USA, LLC is an independent insurance agency that sells life insurance directly to clients across the United States.

    Its founding member, Eric Van Haaften, has sold life insurance for over 33 years. Eric has been featured in renowned publications such as Time, Newsweek, Us News, and The Wall Street Journal. 

    Our team of experienced insurance agents and financial planners is dedicated to finding the right coverage for your needs and budget. 

    Start searching for the perfect life insurance policy using our online calculator. We consistently update our rates to ensure you can access competitively priced options from many highly rated life insurance companies. 

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       Eric Van Haaften, LUTCF

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