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Everything You Need To Know About Term Life Insurance

This article contains everything you need to know about term life insurance so you can make an informed decision when shopping for an insurance plan.

Voluntary Life Insurance

To learn about voluntary term life insurance, you first need to know what a voluntary insurance plan is. Voluntary life insurance is an option offered by employers for employees to get life insurance benefits. Some companies extend this opportunity to their employee’s spouses and children as well.

It works by the employee paying the insurance company holding the policy, a monthly premium for death benefits paid to the employee’s chosen beneficiary when the employee dies. Because the employer is sponsoring the program, the monthly premiums are usually lower than what the employee would pay privately for a similar policy.

But, it is always good to examine other options and compare insurance plans to ensure you get the best policy available at the lowest rates. To select the right voluntary insurance policy for you, consider your needs, goals, and your budget.

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What is Voluntary Term Life Insurance?

Now that you understand what voluntary life insurance is, you may already know that voluntary term life insurance is a policy offered by your employer that provides you with coverage for a limited time.

Unlike whole life insurance that never expires, term life insurance is good for a certain number of years, such as 5, 10, or 20 years. Once you reach the deadline, you may have the option of extending your policy for a longer period, whereas your premiums may stay the same or increase.

While annual renewable term life insurance does not build cash value and does not include any variable investment benefits, it is much cheaper than voluntary whole life insurance plans.

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Term Life Insurance with Living Benefits

Term life insurance can help support your loved ones financially after you die. Your family will receive a check for the amount you agreed on. This money can help your beneficiary pay bills, and cover your funeral, cremation, or burial costs, and they may still have money left over to cover their own needs or save for the future.

But what happens if you should come down with a serious illness that requires long-term care? With the high costs of healthcare today, an incident like this can drain your finances. You would not be able to continue working because of your illness, so you would have to dip into your savings to foot the big medical bills rolling in. You may also need personal care, which can take another chunk out of your savings.

That’s why many insurance companies offer what they call riders. These are optional benefits you can add to your policy to customize your coverage and meet your requirements and needs. Also known as a terminal illness rider, living benefits are among the most commonly used riders.

Once approved, you will receive the funds and can use them however you choose. It is also important to note that there may be an extra cost to add a rider to your policy, whether it is new or existing.

Term life insurance with living benefits can provide you with peace of mind. This is because it allows you to gain access to a part of your insurance payout while you are still alive. You can pay your expenses and stay afloat if you should get diagnosed with a serious illness. Just remember that the illness must be listed under the covered illnesses in your contract, which varies by provider.

Convertible Term Life Insurance

While term life insurance is an affordable protection plan for your loved ones, keep in mind that it isn’t permanent. It is only temporary coverage that lasts for a set time of 5, 10, 15 years, or whatever period it states in your policy. Term life insurance is good for those who currently can’t afford the high cost of whole life permanent insurance.

But what if things change in the future to where you can afford a permanent policy? It would make sense to convert your term life policy into permanent coverage. This type of insurance plan will last a lifetime and even have more benefits, which is why it is more expensive than a term life insurance plan.

Most insurance companies offer term life insurance policies that are convertible. This means that your term insurance policy can be traded, exchanged, or converted to a permanent policy issued by the same provider.

To find out if your term life policy is convertible, check the terms of your policy. If you can’t find this information in your policy, call your insurance provider to find out what your options are. Please take note that some insurance policies may have a time limit to convert your policy, so don’t delay.

Renewable Term Life Insurance

A term life insurance policy expires after a set number of years. But, with a renewable term life policy, you have the option of renewing your plan after it expires. A term policy can last for one year or more. One of the best things about a renewable insurance plan is that you can renew it without having to undergo a new medical exam to qualify. But, your premiums may go up each year or in a few years with your age.

Renewable term life insurance provides an affordable way for you to maintain life insurance coverage as you age. This life insurance plan was designed for healthy, young people to access coverage with the lowest premiums possible year after year.

Bear in mind that a renewable insurance policy is a short-term solution that you should only use until you can afford a whole life insurance plan. You can also buy a 10 or 20-year fixed premium rate term insurance policy that is usually cheaper and allows your rates to stay the same.

Get the Best Term Life Insurance Plan For You

Having term life insurance can help ease your mind, knowing that your loved ones will remain protected even when you are gone. Contact Outset Insurance to learn more.