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.
Websites:
https://www.prudential.com/
https://www.statefarm.com/
https://www.newyorklife.com/
https://www.northwesternmutual.com/
https://www.transamerica.com/individual/
https://www.mutualofomaha.com/
https://www.usaa.com/?akredirect=true
