Listen to the radio and you will hear endless advertisements for term life insurance. So, what exactly is it? Glad you asked.
Term life insurance is the original kind of insurance. It provides a basic payout in the case of the death of the policy holder during the time span of the term. There is normally no extra premium that is invested and the policy does not accumulate a cash value during the term. It is the simple wager concept of the old life insurance adage. The Insurance Company makes a bet that you will not die during the term. You are, in a way, making a bet that you will die. If you do die, you win. If you do not die, the Insurance Company keeps the premiums that you paid.
Despite the irony of viewing term life insurance in that manner, it does play a vital role in the personal financial planning process for many people. It is basically risk management. The idea is usually to provide for other people who might be dependent on you for support. This support might be simply the replacement of lost wages in case of death, but also includes other factors such as education expenses, mortgage payments, and even funeral expenses.
Term life insurance is a viable pursuit for the Insurance Company because the statistics show that a normally healthy person has a very small risk of dying during the term. In other words, they win most of the bets. Since a medical examination is usually part of the process, terminally ill people would not be eligible to purchase normal term insurance. The terms can run for any period of time although most of them run from 10 years to 30 years in length.
A term life insurance policy can be renewed when it expires although most likely the premiums will be higher. There are several different ways that the premiums are calculated. In some policies, the option to renew is guaranteed and the premiums are averaged for the life of the term. In this way, the premium remains constant although it will tend to be a bit higher at the beginning.
Term life insurance is generally the less expensive option when considering risk management. Since there are no additional funds being added to the premiums for investment purposes such as happens in whole life policies, it is merely the death benefit that is being purchased. When you are considering insurance as a protection to your dependents and your interests in the case of an untimely and unexpected death, term life insurance is a sensible option.
These are term life insurance policies. As the premiums are quite affordable the people are buying like warm freshly baked bread.
Technology has come a far way and this is one of the main reasons why these policies can be sold online. The applicant is asked many relevant questions and the life insurance checks the accuracy of the answers. There are those who may assume that this is an opportunity to get life insurance they wouldn’t normally qualify for. There is nothing further from the truth. The life insurance companies know exactly what they are doing. They check out each buyer thoroughly. What the applicants are getting are policies that they would normally qualify for.
In my humble opinion these policies were designed for people who just have no time to do a medical examination but want a policy to protect their families or businesses. There are certain limitations to these no exam life insurance policies. One company limits the policies to $250,000. The applicant has to swear that the information they give to the life insurance company is true to the best of his or her knowledge and belief.
If the applicant needs a policy larger than $250,000 s/he has to simply find the time to have a medical examination done. If the policy is large enough or if there is any indication that there is a physical condition that may cause the policy not to be issued a second medical examinations may be needed.
People are taking better care of themselves today, as compared with 20 or 30 years ago so, even though no exam life insurance may be risky, the life insurance companies are quite happy to issue many of these policies. The buyers are happy as well since they don’t have to go through the rigors of a medical examination.
Term life insurance is the original kind of insurance. It provides a basic payout in the case of the death of the policy holder during the time span of the term. There is normally no extra premium that is invested and the policy does not accumulate a cash value during the term. It is the simple wager concept of the old life insurance adage. The Insurance Company makes a bet that you will not die during the term. You are, in a way, making a bet that you will die. If you do die, you win. If you do not die, the Insurance Company keeps the premiums that you paid.
 |
| pixabay.com |
Despite the irony of viewing term life insurance in that manner, it does play a vital role in the personal financial planning process for many people. It is basically risk management. The idea is usually to provide for other people who might be dependent on you for support. This support might be simply the replacement of lost wages in case of death, but also includes other factors such as education expenses, mortgage payments, and even funeral expenses.
Term life insurance is a viable pursuit for the Insurance Company because the statistics show that a normally healthy person has a very small risk of dying during the term. In other words, they win most of the bets. Since a medical examination is usually part of the process, terminally ill people would not be eligible to purchase normal term insurance. The terms can run for any period of time although most of them run from 10 years to 30 years in length.
A term life insurance policy can be renewed when it expires although most likely the premiums will be higher. There are several different ways that the premiums are calculated. In some policies, the option to renew is guaranteed and the premiums are averaged for the life of the term. In this way, the premium remains constant although it will tend to be a bit higher at the beginning.
Term life insurance is generally the less expensive option when considering risk management. Since there are no additional funds being added to the premiums for investment purposes such as happens in whole life policies, it is merely the death benefit that is being purchased. When you are considering insurance as a protection to your dependents and your interests in the case of an untimely and unexpected death, term life insurance is a sensible option.
***
No Exam Life Insurance-Not New But Innovative
The idea of no exam life insurance is by no means new. It is a little more liberal than it used to be and we have a new generation embracing the idea. There are many variations but one company makes the idea quite exciting. Not that it is being sold online, as quite a few companies make these policies available online, but simply that if you are between age 18 and 60 you can get a no exam life insurance policy. The cut off age for this type of policy used to be much younger.These are term life insurance policies. As the premiums are quite affordable the people are buying like warm freshly baked bread.
Technology has come a far way and this is one of the main reasons why these policies can be sold online. The applicant is asked many relevant questions and the life insurance checks the accuracy of the answers. There are those who may assume that this is an opportunity to get life insurance they wouldn’t normally qualify for. There is nothing further from the truth. The life insurance companies know exactly what they are doing. They check out each buyer thoroughly. What the applicants are getting are policies that they would normally qualify for.
In my humble opinion these policies were designed for people who just have no time to do a medical examination but want a policy to protect their families or businesses. There are certain limitations to these no exam life insurance policies. One company limits the policies to $250,000. The applicant has to swear that the information they give to the life insurance company is true to the best of his or her knowledge and belief.
If the applicant needs a policy larger than $250,000 s/he has to simply find the time to have a medical examination done. If the policy is large enough or if there is any indication that there is a physical condition that may cause the policy not to be issued a second medical examinations may be needed.
People are taking better care of themselves today, as compared with 20 or 30 years ago so, even though no exam life insurance may be risky, the life insurance companies are quite happy to issue many of these policies. The buyers are happy as well since they don’t have to go through the rigors of a medical examination.
Posting Komentar untuk "Introductory Guide to Term Life Insurance"