Term life insurance is a product that is designed to provide coverage of financial responsibilities to your beneficiaries in the event something unfortunate happens to you. It is a life insurance product that provides coverage at a fixed rate for a specified time period. Upon expiration of this term, the client must either forgo their coverage or renew their term insurance life policy. If you were to die during the insured term, the death benefit will be paid to the beneficiary.
Payouts awarded from a term life insurance policy can provide much needed funds to deal with:
- Covering short-term debts (like mortgage payments)
- Dealing with taxes owed on your estate
- Rectifying personal or business loans and lines of credit
- Expenses due to funeral costs
Why Choose Term Life Insurance And Not Permanent?
When deciding between term and permanent life insurance, the amount of protection and features you require are based upon your lifestyle and your unique needs. While some people need it, they may not be able to afford permanent life at a particular time. This is why term life insurance is the best place to start and be used as a stepping stone towards purchasing permanent life.
Sometimes a new family will require protection, but also has other financial obligations such as car, home rental or mortgage payments. Term life insurance offers low-cost, short-term protection but with full coverage benefits. Yet, because it is renewable, it still provides a dependable solution.
For a young family, it may be wiser to have term coverage rather than nothing at all in terms of protection. The cost to insure will vary depending upon the length of term selected. So you can see how term life insurance has more flexibility when a budget is tight.
After a time, the insured may find it possible to simply switch from term life insurance to permanent when the funds allow and the need arises. Depending on the insurer, proof of health may not be required.
Another reason term life insurance is preferred may be due to a job or certain life changes. When a new career presents itself, it can mean added risk and peril. Sometimes people desire extra security during this transition period.
Major Features of Term Life Insurance
There are many types of term life insurance policies that range from 10, 20, and 30-year renewables. The main benefit for having flexible renewal times is as a cost saving measure. In most cases, premiums will remain completely fixed for the term period you’ve selected. They only increase with your age at renewal time. So locking into a 30-year plan (though with a slightly higher premium) can make monthly payments predictable.
There are a great many options available to the customer who has a Navigators/ McLean Hallmark Financial broker to advise them on making an informed purchase.
Term To 100 Term Life Insurance
As name implies, this policy covers you up to 100 years of age. In effect it functions like a permanent policy. But unlike a permanent policy, because it’s still considered to be term life insurance, premiums don’t increase. So in a way, it functions with the benefits of both worlds in the same product.
Longer term life insurance can provide lengthier protection to account for family plans such as paying for a post-secondary education. Or consider the cost of leaving a legacy for future generations by setting up a trust fund built upon the payout from a policy.
Remember though that issues can occur when keeping accurate accounts of regular payments and your banking information. It’s important to make sure that your broker is aware of changes to your banking information. Switching banks during the term of the policy can cause problems when it comes to continuing to make regular payments.
Financial Planning And Life Goals
If you’re expecting your first child, putting a mortgage on a new home, or looking to top up existing insurance protection, it’s best to do some financial planning first. Discuss your life goals with your family to better understand where you plan to be in 10, 20 or 30 years. In most cases, insurance is affordable and can work with any economic situation. This is the type of information you need to have before you talk to a broker.
Whatever your insurance needs, it’s always advisable to discuss changes in your lifestyle, financial goals or long-term desires with your broker. Always ask for assistance when filling out applications to avoid making errors or omissions. This applies before and during the time of coverage. Talk to a McLean Hallmark Financial / Navigators broker today to get a quote and answers to any questions you may have.