Term life insurance, like all other forms of insurance, does not come in a one-size-fits-all bundle. There are a variety of types and prices, depending on a number of variables. Many individuals presume that all life insurance plans are the same and are unaware of or underestimate any of the policy’s many advantages.
We’ve compiled a list of the top eight reasons to buy term life insurance however please do connect with an expert before you decide to buy for the best policy for your personal circumstances.
Most Straightforward Type of Life Insurance
A term life insurance policy is the most common and transparent form of life insurance: You select term period, if death occurs during the term, the death benefit (sum insured), gets paid to the beneficiaries of your choice. Death can be from all causes; accidents, illness, disease, including COVID 19. The benefit can also be triggered by a terminal diagnosis. If no death occurs in the selected term length, that’s it. Popular add-ons and complimentary products include:
Since it is temporary and only pays a death benefit to policy beneficiaries, if the beneficiary dies within the policy’s duration, term life insurance is cheaper than a whole life or univerisal life insurance. These types of products are frquently coupled with an investment element, so the montly premium is is 5-10X more, but there’s cash back element due to the investment. We don’t favor these types of products as they’re higher fees and premiums, so we separate them and instead offer a separate savings plan or investment platform account if you’d like an investment element to your life insurance.
Since the risk is even lower than that of whole life or universal life insurance, term life insurance is the most affordable choice in the life insurance product line.
There are no cash values in the plan, unlike whole life and universal life, because the premiums are solely for the life insurance death payout, which keeps the rate down. Term life insurance is a simple choice that protects the essentials: giving money to your dependents in the event of your unexpected death. The majority of people regard it as a cost-effective life insurance solution.
Fixed, Level Premiums
Unlike health insurance, term life insurance doesn’t increase with age, medical or economic inflation. The price you pay is locked in based on your age at entry, it does not increase thereafter. Coupled with already cost effective premiums, this makes term life insurance a no brainer for many types of people. The price you pay at entry is based on:
Medical conditions and history
Fixed, level premiums make term life insurance very price sustainable throughout your term. Your premium would only increase if you extend the term-length or wanted to add more coverage. If that occurs, you may require new medicals and new underwriting, so it’s always best to take out more coverage and a longer term than you think you may need from onset. Please also be aware that your benefit will not increase with time and inflation too, $250,000 now won’t be worth the same in 15 years.
Choice of Terms
When it comes to term life insurance, you have a lot of opportunity to tailor your paln to your exact needs and budget. Annually renewable life insurance is only one year of cover like the name indicates. What about term life insurance?
As mentioned, you’re covered for death from all causes during your selected term period. Common terms include in 5, 10, 15, 20, 25, 30 and 35 years. However, if you need a specific time period like 17 years, then you can also do that. In addition to doing a fixed terms, you can also choose:
To age 80
To age 90
To age 99
With these policies, you’re term runs until you reach that age unless death occurs before then.
Worldwide Coverage & Portability
Make sure you’re covered no matter where you live, work or travel to. Your residence country is on one of the primary factors in determining your price, but your coverage area is worldwide. This is important if you’re traveling for work or holiday. Some people may have a life insurance policy from their home country which actually doesn’t cover them if they’re living as an expat outside of thier home country.
In addition to worldwide coverage, you also can enjoy worldwide portability, which means you can take the policy with you if you move away form your current residence country. This includes back to your home country.
Some local life insurance in South East Asian countries only is for residents of that country. Then if you moved, your policy is over as the eligibility requirments are for that country only. Even some of the big global life brands like AIA, Manulife, Generali, etc. operate like this as they treat each country as separate entites.
Family History of Critical Illnesses
Most insurers offer an add-on for critical illnesses to provide you with coverage if you are diagnosed with a critical illness. When a person is diagnosed with a serious illness, they may need assistance with the following:
Compensation for missed wages due to sickness
Monies to offset mortgage or rent fees, as well as living expenses
Funds for medical treatment and prescriptions
Supplementary income for the household
Money for ongoing care, rehabilitation and any other expenses that may arise from having a cirtical illness
Monetary support with potential bills such as the children’s education
With any term life insurance policy, you are able to choose beneficiaries as you see fit. This can include:
Within all levels of beneficiaries, you’re able to choose multiple people and the percentage to each person. In the event the primary beneficiary(ies) are also deceased at the time of your death, then the payout goes to the your secondary beneficiaries. The payout can go to a bank account of the beneficiaries choice. Any inheritance taxes will be deteremined based on their nationlity and residence country.
You’re also able to create a term-life insurance which pays out to a trust, which you create as part of your estate planning. For keyperson insurance, the beneficiary would be to the company, who take it out on a keyperson in a business.
Life insurance may not benefit you directly, so you may think why bother. Term life insurance premiums are very cost effective and the lasting impact for your beneficiaries is immeasurable. If you think about it, perhaps one of the most selfless decisions you could ever make. We’d love to hear from you in you’re looking for initial quotes and are ready to leave a legacy with life insurance.
Please reach out to us here at Tenzing and we’ll be happy to assist you with understanding what you can get for your term life insurance.
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These articles are intended to give you enough information to make informed decisions, but health insurance is complicated. Whether you still have questions on this topic or feel ready to take the first steps toward getting a policy, our advisors can help.
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