Term life insurance is perhaps the simplest form of life insurance. It was developed to provide temporary life insurance protection on a limited budget. Since term insurance can be purchased in large amounts for a relatively small initial premium, it is well suited for short-range goals such as life insurance coverage to pay off a loan, mortgage, or providing extra life insurance protection during the child-raising years. As the name suggests, Term life insurance policies provide coverage, with level premiums, for a specified period of time. Usually for 5, 10, 20,or 30 year periods. The policies can be renewed or continued at higher premiums when the term ends.
Features of Term Life Insurance
The one that’s right for you depends on many factors, including: your budget, the amount of coverage you need, and the length of time you’d like the coverage to last. Contact your Keystar Insurance Agent to customize a policy to fit your desires.
- Initial affordability.
- Adjustable premiums: Term life insurance policies can have level or adjustable premiums. This means that premiums may increase or decrease at some point specified in the policy based on; projected changes of investment earnings, mortality experience, persistency, or expenses. However, premiums may never be raised above the maximum premiums stated in the policy.
- Renewability: Level term insurance policies may allow the policyholder to continue coverage past the original coverage period of the policy. However, the premium increases to the amount for the then attained age of the insured, at each renewal. This right is usually offered for a specific period, which varies depending on the carrier.
- Conversion: Most states allow the policyholder to exchange a term life insurance policy for a whole life insurance policy, while the policy is in force (subject to established policy minimums).
*** Policy provisions and conditions may vary, depending on the carrier. Make sure that you understand the policy stipulations of the company and policy you choose.