Term Life Insurance
A term life insurance is an insurance policy that lasts for a specific number of years. For example, if you have a 30 year term life insurance policy then you will pay premiums for 30 years. If you die within that 30 year time period, then your beneficiaries get the benefit.
These plans are popular because they are often very affordable, and have no cash value until you die. They’re also very straightforward.
What happens to term life insurance at the end of the term?
Nothing. The policy expires. If you don’t renew it or start a new one there won’t be any death benefits available to your family if you die.
There are some policies called return-of-premium policies that repay exactly the premiums you paid in with no interest, and the money is tax free. You would have to purchase that kind of policy to receive those benefits.
Keep in mind that a return-of-premium life insurance policy will cost up to 30% more than a regular term life policy. For most people it’s going to be smarter to select a term that they’re unlikely to outlive.
Which is better, term life insurance or whole life insurance?
It depends on your goals. Whole insurance is a lifelong policy and gains cash value as you age. The cash value of the policy grows as you age. You may also receive benefits from your policy, which is why some people use whole life policies as a component of their retirement planning. Many people purchase both.
If your goal is to make sure your family can cover expenses after you’re gone and you’re an older person who is unlikely to outlive the term, then term life insurance is a great choice. In many cases, the trick will be to choose a term length that makes sense given your age, health, and lifestyle.
If you’re trying to build wealth, then you might want to look into whole life insurance.
Do you need a medical exam for term life insurance?
You will for some policies, but not for all of them.
A benefit of working with an independent agent is that you can get the policy that’s best for you and for your goals. That includes finding a policy which doesn’t include medical exams, or which requires only that you answer a few basic health questions.
Keep in mind you may have to pay a higher premium if you’re unwilling to take a health exam. This is because you’re asking the life insurance company to assume more risk.
Many health exams require a weight check and a routine blood draw that can be done within the comfort of your own home. Not all of them will require you to go out of your way to visit a doctor. Of course, if you know you have some health issues paying the higher premium and forgoing an exam might be in your best interest.
Ask me for the advice that applies to your unique situation. It’s why I’m here!
Interested in purchasing a term life insurance policy?
Just call (504) 228-7184 today. Landeche Insurance Agency is here to help! You can quote and apply on line!