Term Life Insurance

Term life insurance provides coverage for a specific period known as the “term” and pays a death benefit to your beneficiaries if you pass away during that time. It is often the most affordable type of life insurance, especially for young and healthy individuals.

When you purchase a term policy, the insurance company determines your premium based on:

• The policy’s face value (death benefit)
• Your age, gender, and health
• Lifestyle factors such as:
  • Smoking status
  • Current medications
  • Occupation and hobbies
  • Family medical history

In many cases, a medical exam may be required as part of the underwriting process.

Let’s say 30-year-old John Doe purchases a 10-year term life insurance policy with a $500,000 death benefit. His monthly premium is $100.

• If John dies within a 10-year term, the policy will pay $500,000 to his beneficiary.
• If John outlives the term, no benefit will be paid unless he renews or converts the policy.
• If John renews the policy after 10 years, the new premium will be higher because it’s based on his age at that time (40 years old).

It’s also important to note that if John is diagnosed with a terminal illness during the term, he may no longer qualify for a new policy when the term expires. However, some term policies include guaranteed renewability or conversion options that allow you to extend or convert coverage without a medical exam, though these features usually come with a higher premium.