Friday, November 07, 2008

Types of Term Life Insurance

Term life insurance is guaranteed life insurance that provides coverage in the event of a death for a specific period of time, which differs from permanent life insurance which has no time constraints.

Most often term life insurance is purchased to protect the financial debts of the insured to pay off a mortgage, auto, or other debt so that no financial burdens are left to dependents or other family members of the deceased. The shortest period of coverage most frequently offered by an insurance company for an applicant to buy is a one year policy.

After coverage has ended on a term life insurance policy, a feature of term life coverage is that the policy is renewable. However, some insurance companies require proof of insurability; underwriting a policy then will require a medical exam. At the time of renewal, if a policy is issued, premiums for the insured will be determined based on current age and the cost is usually higher for older applicants due to increased risk of death.

Term Life Insurance is for all

Today, there are several options for interested applicants as to which insurance company to select to apply for term life insurance coverage. With all the options available, applicants can have multiple questions as to what to look for when searching for term life insurance.

First, applicants rarely think to look at financial ratings of insurance companies. Ratings of insurance companies allow applicants and customers to know their financial stability, which is their ability to pay out a benefit in the event of a death or accident. Second, the amount of coverage should be compared among different companies. Almost all insurance companies offer free quotes to applicant, which can be obtained through mail, phone, or Internet. In obtaining a term life quote, an applicant needs to be aware of the amount of protection they are being quoted for and determine if that amount is enough for their life insurance needs. Third, applicants need to look at affordable payment plans for their term life insurance policy. Plans can sometimes be more affordable if paid by the month versus yearly.

Term Life Insurance needs updating

Once someone purchases a term life insurance policy, the policyholder should follow up and review their policy to make sure that it contains the important information regarding his/her benefits. And most importantly to continue coverage, the policyholder will need to ensure that no late payments are made on their term life insurance policy.


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