Purchasing life insurance is not an easy task. It is confusing and can sometimes be frustrating. The information associated with different insurance plans may not be easy to understand to some consumers. Even for those who have a little understanding of how insurance works, it sometimes gets complex.
Term Life Insurance is a simple type of Insurance Plan. This kind of insurance provides protection to policyholders for a specific period of time. Some families would prefer this type of insurance than traditional ones.
In the past, there are different kinds of term insurance – the 1-year policy, 5-year, and the 10-year policy. Then, a 20-year policy surfaced in the market. But it didn’t end there. Insurance carriers further offered the 30-year policy to their clients. Today, 1-year increments are available. Insurance companies give options to tailor-fit your Term Life Insurance Policy based on your needs.
It is important to note that with the traditional insurance policy, the appointed beneficiary receives the face amount of the death benefit given that during the specified time, the policy is still in force. On the other hand, term life insurance is designed purely for the purpose of protection and is therefore more affordable than traditional life insurance.
More and more clients are choosing term life insurance because they have realized that the value of insurance decreases as they get older. A good example will be parents who want to protect their children from unforeseen events by investing in term life insurance. It is wise for them to choose this type of insurance because they know that the need ceases to exist when their children reach the legal age.
Purchasing Term Life Insurance is not a walk in the park. There are important details that you need to know and understand to fully benefit from it. Read on to know more.
Know Your Purpose
There are many things that you need to consider when purchasing an insurance policy. This includes determining your ancestors’ life span and considering your family’s health history.
You can ask yourself what your purpose in purchasing life insurance is. Is it for protection or how much insurance coverage you want when you get old? Is it about making sure that when you pass away, all mortgages will be covered by your insurance so that the family you are going to leave behind will have peace of mind? Do you want to ensure that your children will be able to live a comfortable life when you are gone?
With this in mind, it is imperative that you figure out how much insurance benefit you would want in purchasing life insurance.
Term Life Insurance Living Benefits
Insurance companies are now offering living benefits on the insurance policies of their clients. This offer is also made available to term life insurance. This has now become an appealing option given by insurance companies to those shopping for insurance policies.
It is undeniable that sometimes we worry about future health conditions – such as being bedridden or seriously ill. This chronic illness or critical illness riders are great supplements to insurance policies. Although not exactly the same, these new additions are like the Long Term Care (LTC) offered in traditional insurance.
To know more about these riders, you can get in touch with your Insurance Professional so you can be given the best advice to suit your needs.
Critical Illness Benefit
Critical Illness Benefit allows you to apply a portion of your Death Benefit while living. This option has become available to most of the insurance products in the market today. This will become available when a licensed medical practitioner provides a medical certificate of terminal illness and provides a possible period of time to live, in accordance to the provisions as stated on your insurance policy. This will be discussed by your Insurance Agent on your purchase of insurance policy.
Security in Choosing Insurance Company
Choosing a reliable insurance company is as important as choosing your Insurance Policy. It is a crucial decision as to whom you will purchase your insurance from. You have to check on their credibility and ability to pay the contract price when the insurance policy becomes activated, that is when you pass away.
Insurance is a mutual contract between policyholders and insurance companies. You commit to paying your premiums and they assure you to grant the benefits to your beneficiaries or the living benefits should you have that in your policy. Thus, it is important that your chosen insurance company will be able to stand on their commitment to their clients on those most pressing times.
Expiration of Term Life Insurance
Term Life Insurance provides coverage for a relevant period of time. If you are investing in a Term Life Insurance, you may ask the question of what happens if your term expires? Are the new premiums affordable after the expiry of your term? What will be your options in purchasing another insurance policy and what are the guarantees that you will get approval from your application? Will you still get your desired insurance coverage at a reasonable price? These are just some questions that need to be addressed when your Term Life Insurance expires.
An Insurance Professional can answer all your questions and provides you with the necessary information and guidelines so you can find the right insurance coverage according to your needs.
The Group Term Insurance
Group Term Insurance is the kind of insurance that covers more than one individual. This is usually offered to companies who give life insurance benefits to their employees. However, more often than not, group life insurance ends when you terminate your contract with your employer or retire from your job. When you acquire health problems while working and you have to quit your job, a problem arises when you learn that the insurance you have with your company is not transferable when you leave.
Group insurance surely provides great advantages, but it is also prudent to acquire your own personal life insurance and consider the insurance provided by your company as supplemental life insurance.
Group Term Life insurance is commonly offered by companies to their employees as part of a benefits package. The application process for this kind of insurance is very simple. Usually, employees will just need to answer some questions about their health history. Once an employee meets the requirements, premiums for the insurance are paid by the employers. Sometimes employees give a small share to be deducted automatically from their paychecks.
With Term Life Insurance being an individual insurance policy, you will be responsible for purchasing your own insurance. You have to be eligible based on the requirements set forth by the insurance company. Generally, in applying for Term Insurance, a physical exam and an investigation of medical history need to be done.
Availing of the Group Insurance provided by your employer may be less taxing and less complicated. But having a personal insurance policy bears with it several advantages that you cannot acquire in Group Life Insurance.
Having your own life insurance policy will give you an assurance that you are protected even after you leave your job. Also, insurance premiums for group insurance increase in time while individual insurance plans have fixed premium contributions during the term of the insurance policy. And finally, individual plans are more flexible compared to the group insurance policy.
Understanding Conversion of Term Insurance
Conversion of Term Insurance is one of the options available to term life insurance policyholders. When buying a Term Life Insurance, it is important to know if there are options to convert your policy to a Permanent Insurance Plan. It is also beneficial to know the provisions in your policy with regards to any medical underwriting upon conversion of the policy. This means that when the term expires, the insurance company will convert your policy despite any medical conditions.
It would be more helpful if you can discuss this with your Insurance Professional Agent so you can have a good idea of how to convert your term insurance. You can also ask if they can provide a good estimation for the option to convert after the expiration of the term policy.
You should know the things that may limit your option to convert your term life insurance. There could be age limits in converting to a permanent policy or with your current policy, you are only allowed to convert to company offerings of specific policies. It is important that a qualified agent is available to help you not only during the purchase of your policy but, more importantly for years to come. To decide on what insurance is best for you and your family’s future, you need to ask all the necessary questions as mentioned above.
For more information about term life insurance, contact the insurance professionals at BBIFinancial at (800) 958-1525 during normal business hours, or you can contact us through our website at your convenience.