How To Understand a Term Life Policy

If a whole life insurance gives you the assurance of certain benefits your whole life, a term life policy can insure you for a certain amount of time. It is more known as level term policy and has different categories. The shortest term life policy that one can apply for is the annual term policy while the longest is a thirty-year life term policy. There is also the age term policy, which you can apply for until you have reached a certain age. They all have different term insurance quotes, so make sure to read more on them.

  • Annual Term Policy. This is a type of term policy that can insure you for a year and you can renew it after the end of every term. But this type of insurance is now least preferred due to the fact that there is a low possibility that the insured person may die within the specified term of one year. If you become seriously ill right after the term ends, some insurance companies will not allow you to renew. Be sure to read the fine print before acquiring this type of policy. Although insurance like this may be applicable for people who have dangerous jobs. Similar to this, the five-year term policy is also renewable until such a time that it cannot be renewed.
  • Ten-year Term Policy (and longer). This policy, along with the longer term policies are also renewable, but are dependent upon the age of the one applying for insurance. If you apply for insurance that will extend beyond the allowable age limit, the company will not allow you to avail yourself of that insurance. They would offer you the next best term life policy available. If you are around your 60s and would like to apply for a thirty-year term life policy, they may suggest that you either take a whole life insurance or a shorter term life policy, unless the age limit for insurance in your state is age 90. Check your state's rules regarding term life policies.
  • Term Policy by Age. You can get a term insurance up to a certain age. If you are in a job or will be in a profession that could be life-threatening in any way and you would wish to be insured for the length of time that you are working for that company, apply for this one. Most would allow you to be insured until the age of 85 while others would only allow up to age 80. Check with your state, because certain states have different policies.

Insurance rates may change per company. Some will not give the assurance of a level term where rates will not increase. They will increase rates, depending on the stated insurance quote. Getting yourself insurance is one way to assure you and your family some financial security in case something happens to you. Making sure that you get the right one is the least you can do to assure a good benefit.


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