Term Life Insurance Explained
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- Опубліковано 21 лип 2024
- Term life insurance which is sometimes referred to as pure life insurance ensures payment of a death benefit if the policyholder dies within a specific term. If the agreed-upon term expires, the policyholder can have the option of renewing the policy for another term or convert the policy to whole life insurance that does not expire. Make sure you check out our video on whole life insurance to get more information on this. The policyholder can also let the coverage expire which would mean that they will not be covered anymore and that the insurance is terminated.
Term life insurance is very suitable for young parents who may be eligible for large amounts of coverage for a reasonably low cost. Term life insurance is also suitable for people who want temporary life insurance and do not want to commit to their entire life or pay high premiums.
The premiums you pay for the term life insurance are mainly based on the value of the policy which is also known as the payout amount or the death benefit. Other factors directly influence premiums such as age, gender, and health. That is why the insurance company requires a medical exam before providing you with coverage. The insurance company may also request some information about your driving record, current medications, smoking status, occupation, hobbies, and family history. Factors that are not directly related to the insured party such as Interest rates, the financials of the insurance company, and state regulations also affect the number of premiums paid.
The premiums paid for term life insurance are lower than other types of life insurance since it only provides a death benefit. That would be in addition to the fact that most term life insurance policies expire before paying that death benefit so the overall risk to the insurance company is lower than that of whole life insurance.
Just to get the sense of it, a healthy 35-year-old man who does not smoke and obtained a 20-year term insurance policy that provides a death benefit of $250,000 would typically pay something between $20-$30 per month.
This is considered very cheap when compared to whole life insurance which would require the same person to pay around $200 to $300 per month to get this permanent coverage.
If you die during the agreed term of the insurance, the insurance company will pay the death benefit otherwise known as the face value of the policy to your beneficiaries. Beneficiaries of the policy can be a person, people, business, or a non-profit organization that gets the death benefit if you pass away. This non-taxable death benefit may be used by the beneficiaries to settle any outstanding consumer or healthcare debts you have, funeral costs, or even pay off a mortgage debt.
You need to make sure that your family members know about your term policy and who to contact in the case that you passed away so they can access the death benefit available to them. The death benefit may remain unclaimed if the beneficiaries do not have clear instructions on accessing the dollars available to them.
Term Life insurance comes in several flavors including convertible, increasing, mortgage, and annual renewable. Each one of these types targets a specific need for potential customers.
Convertible Term allows the term insurance policy which typically has a limited number of years to be converted to whole life insurance before it expires. It does not require the policyholder to do a medical exam nor are any health conditions considered when the term policy is converted.
Increasing Term allows the increase of death benefit as the time goes forward.
The Mortgage Term which is sometimes referred to as the decreasing term is the exact opposite of the increasing term. It's done in a way that the death benefit amount decreases over time.
The last type is the annual renewable which each year renews the term insurance for a higher premium since the policyholder is a year older. The main benefit of annual renewable is that the coverage is guaranteed to be approved every year.
------ Contents of This Video ------
00:00 - Introduction
00:49 - What is Term Life Insurance?
00:56 - Term Life Insurance Expiry & Renewal
01:36 - Term Life Premiums
02:36 - Term Life vs Whole Life Premiums
03:01 - Insurance Beneficiaries
03:59 - Term Life Insurance Types
04:09 - Convertible Term Life Insurance
04:36 - Increasing Term Life Insurance
05:00 - Mortgage / Decreasing Term Life Insurance
05:32 - Annual Renewable Term Life Insurance
05:54 - Choosing the Best Life Insurance Company in the US
06:04 - Term Life Insurance Explained (Summary)
Websites:
www.prudential.com/
www.statefarm.com/
www.newyorklife.com/
www.northwesternmutual.com/
www.transamerica.com/individual/
www.mutualofomaha.com/
www.usaa.com/?akredirect=true
Term Life is an AWESOME option for younger families because of it's low premium-high payout structure. Thanks for sharing!
I found this videos very helpful..
Life insurance very important in life
Brother any idea like international term insurance policy company .Zurich insurance company and MetLife company is which one is best company to buy insurance plan from UAE Dubai .
Good work
My mom had term life for 500k. At age 75 they went from $175 up to $860 month, and then $135,000 payment to continue. It's a scam. Better off buying and renting a home you can resell
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Not all term insurance works the same
you are right boss...there are many types of plans given by individual providers.
@@TheEducationalSeriesplease explain so they have 5 yr term insurance policies?
@@AntonioMartinez-xz3pt The have 10,15,20,25,30 and 35 year term policies. So you can choose the policy that best suits you.
Analiza el ritmo de vida de una persona
the ads for term never mention medical exams as a condition and say your acceptance is guranteed ?? sounds fishy
Up to a certain amount you can get life insurance without an exam.
There is both fully underwritten and express issue. In the express issued there is no need for a medical exam but you should have seen a doctor in the past 18 months. And are required to provide a list of all meds taken and they will run a med search for all the prescriptions that your doctor has prescribed.
ok
life insurance
Flat 1 the brook and smith family flat 1 40 Leopold rd Felixstowe ip11 7np Suffolk England got all there assets and trucks by making fake claim she corol brooks used to work for life insurance and the elderly
So if I don't die during the term period don't I get paid anything???
Is that a bad thing?
@@astroman30 nope the bad thing of term insurance is if live long you still paying insurance..while other insurance after 10years or 15 years you dont pay anything after that..
@@carloconopio6513 Pay (at least) 20 times more in premiums than term for a trash value policy where the insurance keeps your investment? No thanks.
Thank you did a very good job explaining out of all videos I saw so far 😀
Ummmm...YOU don't get paid anything regardless...unless you think you will need money in the afterlife
You forgot level term but overall I did enjoy the video and found it very helpful and informative
term life is for poor people
Whole life is for stupid people
Buy Term and invest the difference very early in life was actually very popular and economical I the 80's and 90's. Today when you have a 30 year mortgage, there shouldn't be a need after 30 years and the home has been paid off.