Life Insurance

Term Life Insurance

General

Term life insurance provides coverage for a specified period of time, which usually ranges from 10-30 years, in 5-year increments, depending on your need for coverage. A death benefit (face amount) is established when the term life insurance policy is applied for. The beneficiary receives the death benefit amount if the insured passes while the policy is in-force.

Policy premiums are available on a guaranteed and non-guaranteed basis. Guaranteed policy premiums remain level throughout the policy's term. Non-guaranteed policy premiums usually remain level for a pre-determined period of time and then begin increasing.

There are a variety of options available on most term life insurance policies, including convertibility options, child riders and accelerated benefit riders. Policies are designed to meet a specific need for a stated period of time and can be particularly useful to anyone who has a financial liability, such as a home mortgage.

Term life insurance provides the lowest priced coverage available in the marketplace. It buys the greatest amount of coverage for the least amount of premium, relative to other forms of life insurance such as whole life or universal life.

Return of Premium (ROP)

Traditional term life insurance, discussed above, expires worthless at the end of the term. Return of premium term life insurance policies refund 100% of your premiums if you live to the end of the term period. This innovative product brings together the advantages of traditional term life insurance such as affordability and premium guarantees, with a refund of premium feature. Furthermore, your refund is 100% tax-free and guaranteed by the carrier.

How is this possible you ask? The insurance companies that offer this type of product charge more for it than for their traditional term life insurance products. The insurance company is then able to invest a portion of the premium for capital growth. As a result they are able to return your premiums at term-end, but if you cancel your policy before the sixth policy year no refund is available. There is a graded scale for years six and beyond, where a percentage of the total premium is refundable according to the year you surrender the life insurance policy.