"I don’t want to tell you how much insurance I carry with the Prudential, but all I can say is: when I go, they go too." —Jack Benny
We can’t tell you whether Jack Benny had a term life policy, but we can tell you that lots of other people do. Most people who buy life insurance choose term life for one big reason: it’s affordable. If coverage + affordability sounds like a winning equation, keep reading.
|Term life insurance pays an agreed-upon amount of money to a person’s beneficiaries if he or she passes away during the term of the policy.|
So what's the catch? A term policy doesn’t cover you for your entire life. Just like a president, it’s given a job to do for a particular stretch of time, and everyone knows when that time will end. It's up to you pick your term, and we're here to help you do just that. Trusted Quote has helped families protect themselves with life insurance for more than 40 years. Whether you're just starting out or easing towards retirement, we can help you protect your family with a policy that's right for you.
To get a feel for what a term policy offers, check out our video below.
It’s more affordable because it’s limited in time. There’s a possibility the insurance company might not have to pay out on your policy. For all the times this has happened, they’ve saved money. They can afford to pass some of these savings onto you.
It’s also less expensive because your payments fund the death benefit and nothing else. Other types of insurance that cover you for your entire life often allow you to accumulate cash value in an account linked to your policy. This involves managerial oversight, general account setup, and account maintenance. “The best things in life are free,” sang Barrett Strong, but a cash value account isn't one of them.
We don't think so, and here's why:
Return of premium =
Yes. There’s a type of policy called “return of premium.” This means that if the insurance company doesn't pay out by the end of your term, they will refund your money. This is a double bonus for you because it means that (a) you’re not dead, and (b) you now have a bunch of money.
You can expect to pay 20% to 30% more for a policy this awesome, however. It’s also in your best interest to keep the policy through the entire term. You might be able to get a partial refund if you cancel the policy halfway through, but it depends on your insurer and your specific policy. If this is something you're worried about, be sure to ask your agent what happens if your policy lapses.
They say a picture is worth a thousand words. We only need three: Life insurance = love.
If you think this might happen, get a policy with “convertibility.” Usually, things that are convertible leave you with a bit less to work with—a car with the top down, or those pants that zip off at the knee. In this case, convertibility gives you more.
A convertible policy gives you the option to change your term policy into a whole life policy (a permanent policy). The best part is that you can do this without taking another medical exam or otherwise explaining your health to your insurer.
If, for example, you get a term life policy and are struck by lightning the next week, you might want to consider converting to a whole life policy. This safeguards against the possibility that aftereffects from your strike would keep you from qualifying for another policy once your term ended. It's a great way to hedge your best against future health problems that might drive up the cost of another policy.
Little-known fact: No one can agree on the odds of being struck by lightning. The NOAA puts it at 1 in 1 million or 1 in 775,000, depending on reported deaths vs. estimated total deaths. InsureMe.com puts your odds at 1 in 600,000. NationalGeographic.com puts it at 1 in 700,000.
You have a couple of options for retaining your policy. This video explains it all:
Essentially, if you don't want to convert your policy to a whole life policy, you have the option to renew. If you take this option, be prepared for a rate hike. Chances are you’re 2-3 decades older than you were when you first bought your policy, so when the insurer takes a second look and re-evaluates your rate, they’re probably going to raise it.
You'll probably also have to take another medical exam. Unless you’re buying a specific type of policy that doesn’t require a medical exam (called “guaranteed issue”), your insurer will want to see how healthy you are…and how a big a risk you are to insure.
The LIFE Foundation compares a term life policy to renting a home. The policy is yours to enjoy for its term, but you’re not building equity. Once you stop renting (your term ends), your rent-controlled living days are over and you’re back on the market with everyone else. Caveat emptor, in other words.
There are two ways to handle this:
The term that works for you might not be the term that works for your neighbor. It depends on your family, your needs, and your favorite characters in The Breakfast Club. Really, it does. Bear with us through an analogy:
If you're ready to get a free quote for a term policy, just click the orange button below!
National Weather Service: Lightning Safety
InsureMe.com: Lightning Claims Shocking
NationalGeographic.com: Flash Facts about Lightning