A Guide to Term Life Insurance

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

What is Term Life Insurance?

Term life insurance is a type of life insurance policy that provides coverage for a specific period, or “term.” If the insured person passes away during this term, a death benefit is paid out to the beneficiaries. It’s straightforward, without the bells and whistles of other insurance types.

Whats Term Life Insurance Mean

Types of Term Life Insurance

  1. 10-Year Term
    • Benefits: Ideal for short-term needs with lower premiums.
    • Considerations: Suitable if you expect your financial obligations to decrease significantly in the near future.
  2. 20-Year Term
    • Benefits: Balances cost and longer coverage, providing a more extended period of protection.
    • Considerations: Great for those with young children or mortgage obligations that will last for a couple of decades.
  3. 30-Year Term
    • Benefits: Offers long-term financial security, especially for younger policyholders.
    • Considerations: Higher premiums but ensures coverage during crucial earning years and major life events.
  4. 40-Year Term
    • Benefits: Extended coverage with the longest term available, providing peace of mind for the most extended period.
    • Considerations: Higher premiums are best for those seeking the longest protection period possible.

Pros and Cons Of Term Life Insurance

  • Pros:
    • Affordability: Lower initial costs compared to whole life insurance.
    • Simplicity: Straightforward policies without complex investment components.
    • Flexibility: Various term lengths to match your specific needs.
  • Cons:
    • No Cash Value: Unlike whole-life policies, term insurance does not accumulate cash value.
    • Temporary Coverage: Only provides protection for the chosen term length, after which you may need to renew at higher rates.

Top Companies for Term Life Insurance

Compare Rates With Other Companies

Before buying a term life insurance policy, use a calculator to compare costs and benefits. This tool considers your age, health, and desired coverage amount, providing premium estimates and policy value over time. It also allows you to compare term life with other types like universal and whole life insurance. This comparison highlights the strengths and weaknesses of each option, helping you choose the best policy for your needs.

How We Can Help

At The Annuity Expert, we understand that choosing the right term life insurance can be daunting. As an insurance agency, annuity broker, and retirement planner with 15 years of experience, we specialize in finding the best solutions at the lowest costs for our clients.

Understanding Your Needs

Your primary concern might be securing financial protection for your family or covering specific financial obligations. We know that the main problem is finding a policy that offers sufficient coverage without straining your budget. Common symptoms include feeling overwhelmed by the choices available and uncertain about the future financial stability of your loved ones.

We stand against complicated, high-cost insurance solutions that don’t offer real value. Our mission is to provide you with clear, affordable, and effective term life insurance options that meet your unique needs.

Term Life Insurance Meaning

What We Recommend

Step 1: Initial Consultation

  • What Happens: We start with a thorough consultation to understand your financial situation, goals, and concerns.
  • Main Benefit: Personalized advice tailored to your specific needs, ensuring you get the most suitable coverage.

Step 2: Policy Selection

  • What Happens: Based on our consultation, we present you with a selection of term life insurance policies from top-rated companies.
  • Main Benefit: Clear comparisons and expert recommendations help you make an informed decision.

Step 3: Application and Approval

  • What Happens: We assist you through the application process, ensuring all paperwork is accurately completed and submitted.
  • Main Benefit: A smooth, hassle-free experience leading to timely approval and coverage.

Features and Benefits

  • Comprehensive Coverage: Policies that match your financial needs and goals.
  • Affordable Premiums: Options that fit your budget without compromising on protection.
  • Flexible Terms: Various term lengths to suit different stages of life.
  • Expert Support: Guidance from experienced professionals at every step.

Addressing Common Objections

  • High Costs: We find the most cost-effective solutions without sacrificing coverage.
  • Complexity: Our expert team simplifies the process, making it easy to understand and choose the right policy.

Not working with us could result in inadequate coverage, leaving your loved ones financially vulnerable. However, partnering with us ensures peace of mind, financial security, and a clear path to protecting your future.

By choosing The Annuity Expert, you will feel secure knowing your family’s financial future is protected. You’ll experience confidence in your financial decisions and satisfaction from personalized, thoughtful service.

Contact us today for free advice or a quote. Let us help you secure your future with the right term life insurance policy.

Term Life Insurance Assistance

Contact us if you need help purchasing a term life insurance policy. The service is free of charge.

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Questions From Our Readers

What happens when your term insurance expires?

In most cases, when your term life insurance policy expires, you essentially become uninsured. If something were to happen to you after the policy term, your beneficiaries would not receive any death benefit. The coverage ends, and you’re no longer paying premiums.

Do you get money back after it has expired?

Standard-term life insurance policies do not offer a return of premiums at the end of the term. So, if you outlive your term life insurance policy, you generally do not get any money back unless you have a return of premium (ROP) term life insurance policy.

What happens if I live longer than my term life insurance?

If you live longer than your term life insurance, the policy will expire, and you will not receive a death benefit. Instead, the policyholder must purchase a new policy or opt for a different form of coverage.

Does term life insurance have cash value?

No, term life insurance policies do not have cash value. The premiums paid towards a term life insurance policy are solely used to provide death benefit coverage. Once the policy term ends, the coverage ends, and there is no cash value component. Term life insurance is designed to provide affordable life insurance coverage for a specific period, and the premiums are significantly lower than those of permanent life insurance policies.

What happens at the end of term life insurance?

When your term life insurance policy ends, you have a few different options. You can renew your policy, convert your policy, or let your policy lapse.

What is level premium term life insurance?

Level premium term life insurance is a type of life insurance policy where the premium payments remain consistent throughout the term. This allows policyholders to budget for their insurance premiums more quickly, as there won’t be any unexpected increases in their payment amounts. As the name suggests, it covers a specified term, such as 10, 20, or 30 years.

Which component increases in the increasing term insurance?

The death benefit is the main component of increasing term life insurance policy. As you age, the death benefit will increase, providing your loved ones with more financial protection in the event of your passing.

How much does life insurance cost for a 50-year-old male?

For a healthy 50-year-old man wanting a $500,000 policy, the average monthly premium for a 20-year term policy is $79.

How much does life insurance cost for a 50-year-old female?

For a healthy 50-year-old woman wanting a $500,000 policy, the average monthly premium for a 20-year term policy is $63.

How do I sell my term life insurance?

To sell your term life insurance policy, you can consider a life settlement or viatical settlement company. These companies purchase life insurance policies from policyholders for a lump sum. Research reputable companies, gather your policy documents, and compare offers. Remember that selling your policy may have tax implications and affect your beneficiaries.

Can you borrow against term life insurance?

No, you cannot borrow against term life insurance. Term policies do not accumulate cash value, which is necessary for taking out a loan.

Can a 60-year-old get term life insurance?

Yes, a 60-year-old can get term life insurance. Many insurers offer policies to older applicants, though premiums will be higher compared to younger individuals.

When does term life insurance end?

Term life insurance ends when the specified term (e.g., 10, 20, or 30 years) expires. At that point, coverage ceases unless renewed or converted to a permanent policy.

Does term life insurance have a waiting period?

Typically, term life insurance does not have a waiting period. Coverage usually begins immediately after policy approval and the first premium payment.

How much term life insurance do I need?

The amount of term life insurance you need depends on factors like your income, debts, future expenses, and financial goals. A common rule is to get coverage equal to 10-12 times your annual income.

Do term life insurance premiums increase each year?

Term life insurance premiums are usually fixed for the duration of the term. However, with yearly renewable term policies, premiums increase annually.

Why is term life insurance the best option for a young adult?

Term life insurance is the best option for a young adult because it offers affordable premiums, straightforward coverage, and financial protection during the years when they might have significant debts or dependents.

Who offers the best-priced term life insurance?

Banner Life is often recognized for offering competitively priced term life insurance, providing affordable rates and comprehensive coverage options.

Why is life insurance so cheap?

Life insurance, especially term life, is cheaper because it offers coverage for a limited period without accumulating cash value. Premiums are based on the low risk of the insured passing away during the term, making it an affordable option.

When should I stop buying term life insurance?

You should consider stopping term life insurance when your financial obligations decrease, such as when your mortgage is paid off, your children are financially independent, or you have sufficient savings and investments for your dependents.

Can you extend term life insurance?

Yes, you can extend term life insurance by renewing it at the end of the term or converting it to a permanent policy, though premiums may increase.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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