What is term life insurance?
Far be it from me to make you experts in life insurance products.
However, it is good to have a small base, much like shopping for a car.
Even though I know absolutely nothing about engines, I do know, on the other hand, that I need an automatic car because I don’t know how to drive manually.
In insurance, the principle is the same: there are several types of products to meet various needs depending on what suits you best.
Let’s explore the different types of needs together to determine which product is best for your situation.
There are two types of insurance: term insurance and permanent insurance. Since we could say a lot on the subject, we have chosen to deal only with term insurance in this article.
Why buy term life insurance?
Term insurance, as its name suggests, covers a temporary need. Term life insurance allows, among other things, to protect your family against a large short/medium-term debt.
Think, for example, of a mortgage. Paying a mortgage is a big chunk of the family budget. The good news is that we usually finance the house for over 25 to 30 years, and after that, Mama mia! No more payments!
Until then, the mortgage remains the most significant monthly expense for many families.
By having term life insurance, you ensure that you leave a benefit amount – the insurer’s check – to help your family and estate make mortgage payments.
The insurance benefit has often enabled several families to keep their homes and further lighten their burden.
This is a good boost for providers since it dramatically facilitates their management of the family budget.
Because let’s face it, we rarely plan to buy a house if one of the salaries suddenly disappears. As they say, prevention is better than cure.
Another important example of a short/medium term need is the education of your children.
And yes, term life insurance coverage can secure your children’s future by ensuring that they can have the resources to maintain their quality of life and continue their education in the event of death.
Okay, now we know what it’s for, but do we know what term life insurance is?
What is term life insurance?
Term life insurance is simple and much more affordable than you might imagine.
Seriously, it’s possible to get premiums for as little as $ 9 per month for several thousand dollars in coverage.
It offers a fixed amount of coverage for a specific period.
Usually offered over 10, 20, or 30 years, this coverage can be renewed at a later date, at a higher premium, or cancelled if you feel you no longer need it.
It, therefore, provides you with temporary protection that you can modify according to your changing needs. It is a flexible and affordable solution.
However, it is essential to know that this type of product is not generally renewable. Insurers generally do not allow renewing the policy after age 85.
It is also necessary to provide for a reasonably significant premium increase throughout renewals. So it may not be the ideal product if you want to keep this product into your old age.
What is term life insurance online?
Online term life insurance has all the benefits of term insurance, plus it allows you to purchase it 100% online by chatting with a specialist who will help you create tailor-made coverage.
It’s fast, secure, and downright enjoyable.
What are the benefits of term life insurance?
It’s not expensive!
If you are looking for the most affordable insurance product on the market, term insurance is for you.
Be careful, here do not confuse affordable and low quality. On the contrary, the value for money is one of the “must” of term life insurance because it allows you to have the security you are looking for at a reasonable price.
You may be eligible for term life insurance coverage starting at $ 9 / month if you are in good health.
Tailor-made coverage amount.
What can perfectly adjust your amount of protection to your needs?
Coverage amounts range from $ 10,000 – which may be perfectly enough for someone whose goal is to cover funeral costs upon death – to several hundred thousand dollars for someone whose goal is to ” ensure the financial security about your loved ones, or leave them an inheritance.
You can transform your font.
As we now know, life insurance needs are different from one person to another and varying over time.
For example, you can purchase a term life insurance policy when your needs are significant (young children, mortgages, etc.). Upon renewal, when your needs have changed, you can convert your policy to permanent life insurance.
You can improve your insurance policy.
It is possible to graft additional protection into your main contract as quickly as adding extra bacon on a pizza.
These additional protections give added value to your primary product and reinvent it according to your needs.
You can, for example, add a rider to ensure your children, add a critical illness or disability rider.
As you will have understood, you have a wide range of possibilities among the many choices available to you.
This is also why it is recommended to discuss your situation with one of our experts to build your tailor-made protection.
What are the disadvantages of term life insurance?
Premiums increase at renewal.
At the end of your contract term, the premiums increase since they are re-evaluated, taking into account your age at that time.
The older you are, the closer you are statistically to death, the more expensive the bonuses.
If you want to have a fixed premium for life, it is better to choose permanent life insurance. The premiums will be more expensive in the first years and much less in the later years.
It is not eternal.
Generally, term life insurance is not renewable after your 85th birthday. You should therefore consider permanent coverage to protect yourself beyond these deadlines.
It does not offer certain advantages specific to permanent life insurance.
Some permanent insurance products offer a savings component in the contract. If you want to use your life insurance policy to save, see the Universal Life Insurance article.