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No Exam Term Life
Term life insurance offers death benefits just like permanent life insurance provided that the death occurs within the term. Premiums are paid on a monthly or yearly basis which protects your family for that term. Most insurers offer premiums based on age, health and life expectancy.
Unlike permanent life insurance which has an investment component and can be used for wealth or income generation, term life insurance is pure life insurance and its sole purpose is to protect against the loss of income that will result if the insured passed away.
Term life insurance is very suitable for seniors or for people whose insurance needs and coverage are only temporary because they have financial projections and believe that their families will not need the life insurance coverage much longer as they would have acquired enough wealth at a certain age for their families.
There are three basic forms of term life insurance -- annual renewable, level term, and decreasing term.
Annual renewable term insurance offers the lowest premium and it’s very affordable. If your goal is to lower cost in the short term, this can be a good option but premium increases as you age. Annual renewable term insurance is very good if you think your earnings will rise in the near future.
Level term offers a fixed premium throughout the period of the plan. It is guaranteed that the premium will not change or increase from the first year to the last year of the plan. This will give you peace of mind instead of having to bother with premium increase as you age. The common coverage of level term insurance ranges from 5 to 30 years.
Decreasing term is an annual renewable term life insurance policy which offers a death benefit that decreases according to the predetermined rate during the policy life -- the reduction may occur monthly or annually.
Decreasing term life insurance is designed to decrease throughout the plan lifetime -- as the plan ages, the death benefit decreases. The plan helps people with many financial responsibilities that decrease over time to get coverage at lower cost.
Decreasing term life insurance stemmed from the idea that as people age their mortgages and overall debts decrease thus need less life insurance.
Here are what term life insurance can do for you:
- It offers death benefit to your surviving family or protect against loss of income
- It offers protection during child raising years
- To help your surviving family pay off mortgages or college tuition
- To pay for your funeral, or other expenses after your death
Term life is very straightforward and your family collects benefit when you die but it can be tricky as well. Many insurers have exclusions where they decline to pay benefit, these include death in private plane or war, suicide or if you participate in dangerous activities such as car racing, rocking climbing, scuba diving etc.
Many seniors don't participate in this kind of activities but some seniors are very adventurous. There is coverage for this kind of activities but you have to pay a higher premium. Make sure your insurer knows that you take part in this kind of activities so that they can give you a quote accordingly.
It can be devastating for your surviving family if they are refused benefits because your term life didn't cover scuba diving or car racing for instance. So ask your insurer questions and find out if they have other exclusions.