Term life insurance is a term life insurance solution that provides fixed-rate life insurance over a fixed term. The current lifespan is 5, 10 or 20 years, although other options are possible. The longer the duration of the contract, the more expensive the policy is likely to be because it covers a longer period so that the risk of death of the insured during the term will increase. Term life insurance provides only a death benefit and has no monetary value. Life insurance takes age into account when purchasing the policy. Therefore, the younger you are when you buy Convertible Term Life Insurance , the less expensive it will be.
Why is term life insurance less expensive?
Term life insurance is a cheaper life insurance option and a good choice when you are on a budget because it is temporary and only pays death benefits to policy beneficiaries if the insured dies for a limited time. of the police.
The risk is far lower than that of whole life insurance or universal life insurance. Term life insurance is, therefore, the cheapest option in the range of life insurance products. Unlike the whole life and universal life products, the policy has no cash value. The premiums are therefore purely linked to the death benefit of life insurance, which also helps limit costs. Temporary life is a simple option that takes care of the essentials: providing money to your dependents in the event of sudden death. Most people see it as an affordable and immediate life insurance option.
Term life insurance may be more affordable than you think
According to Insurance Barometer, 80% of consumers have a bad idea of the price of term life insurance. Millennial overestimate costs by 213% and Gen X overestimates costs by 119%.
What Happens After Term Life Insurance Expires?
Once the term of the contract has expired, you may not be able to purchase a new term life insurance policy at the lower rate you are used to, as the new contract would be based on your age. The older you are, the more expensive life insurance becomes. If you fall ill and your term life insurance expires, you may have trouble purchasing a new term life insurance policy.
To avoid problems, consider adding an endorsement to your term life insurance policy that allows you to convert it to a whole life insurance policy at the end of the term or to obtain a renewable policy. Your life insurance advisor should review these options with you.
Convertible and renewable term life insurance
Renewable and convertible term insurance can help you avoid finding yourself in a position where you are neither insured nor insured. For example, if you want a low-cost 10-year term life insurance policy and at the end of the term, you want to convert a different term life insurance policy, such as a valued policy monetary, without passing another medical examination, you can choose a fixed-term convertible life insurance policy.
Term life insurance and questionable period
Choosing a renewable or convertible life insurance policy can also protect you from the questionable period of life insurance, which allows you to possibly investigate the payment of the death benefit and to refuse it during the questionable period. The period of contestability usually lasts two years from the date of a new policy. If your intention is to maintain your life insurance beyond the initial term, you should ask your agent about it.