Term life insurance is one of the types of life insurance that you can get. This type of life insurance is in effect for a specific time frame. If the term life insurance policy is still in effect when you die, your beneficiaries will immediately get them. If you are looking into getting life insurance, there are options. Some people find that term life insurance isn’t the best option in their situation. On this note, there are many advantages of term life insurance. You can learn more about these benefits before making your decision.

High Benefits with Low Cost

One advantage of having a term life insurance policy is you can get high benefits. You won’t have to pay much per month. This type of life insurance allows for the highest payouts to the beneficiaries. At the same time, there is a low monthly payment for the policyholder. This doesn’t mean the policy will cost less than other types of life insurance. Although, it can be more affordable in the meantime. The reason for this is because at the time of every renewal, your policy premiums will rise. After many renewals, you will be paying more than you would have paid for a whole life insurance policy. If you die at a younger age, the term life insurance policy would likely be the more affordable option.

Short-Term Needs

If you are looking for short-term life insurance, term life insurance policy might be best. Those who need life insurance for a 10-year time frame or less would choose a term life insurance policy. Do you need life insurance for 15 years or longer? If so, you should choose a cash value life insurance policy. If you need a life insurance policy for 10-15 years, the best option may vary. It will depend on your benefit needs. It will also depend on your health history, your family health history, and other factors, too.

Sometimes, a term life insurance policy is better than a cash value life insurance policy. This may be true if you get them before you turn 45 years old. Are you are older than 45 and need life insurance for 10-15 years? If so, you may benefit more from a whole life insurance policy.

Getting More Coverage

Are you younger and need life insurance? If so, you could benefit more from getting a term life insurance policy. This is an option rather than a whole life insurance policy. Usually, people who are younger will get a better coverage amount at affordable rates. If you are younger, you may even be able to get more coverage than you need immediately if you passed away. This means you could have enough to cover everything or even more. With this note, you can speak to a representative from the term life insurance company today. They can talk to you more about the coverage that you would be eligible for. Not everyone’s circumstances are the same. Depending on your circumstances, you may qualify for a specific coverage amount.

Better Death Protection in the Future

There are some term life insurance policies that allow you to convert over to another policy. This would give you better death protection later. The terms of these types of policies allow you to renew and convert your life insurance policy at a later date. If you can’t afford the higher benefits now, later in your life you may be able to. At that time, you might be able to convert your policy to get more benefits. When doing this, you would be able to lock in your premium. You will also be able to build up the cash value of your policy. This way if you die years from now, your beneficiaries will have more benefits.

Serving Your Needs

You can customize a term life insurance policy to fit your specific needs. You can combine policies to meet these needs, as well. There are many types of term life insurance. These include level, increasing, and decreasing. Do you have permanent life insurance? If so, you can ride your term life insurance policy onto the whole life insurance policy. This creates a package life insurance policy to meet your death protection needs. Term life insurance companies know that not everyone has the same needs. They want to make sure you are getting your needs met. When combining these policies, each individual policyholder can customize a package.

Paying Out without Any Delays

The beneficiaries should get your life insurance benefits immediately after you die. You don’t want there to be any delays. You know that your loved ones will already have a difficult time handling your affairs. They will need time to grieve. They don’t need the added stress of waiting for your life insurance benefits. The term life insurance policy is usually not included in the estate. If the estate isn’t on this list, the beneficiaries can get the benefits immediately. The term life insurance companies are generally good at making these immediate payouts.

Keeping Confidentiality

If you choose to get a term life insurance policy, this won’t be public record. The death benefits your beneficiaries get won’t be public record either. Nobody can search to find who is on your beneficiary list. This helps to keep your beneficiaries confidential. Most people don’t want others to know they have gotten a life insurance payout. Usually, these benefits are large, and others in the family might not handle it well.

Exempt from Federal Income Taxes

You may have avoided getting a term life insurance policy in the past. This might be because you thought the beneficiaries would need to pay a lot of taxes on the benefits. The benefits your chosen beneficiaries receive will be exempt from federal income taxes. These types of benefits are not considered to be taxable.

Exempt from Any Estate Taxes in Some Circumstances

The benefits your beneficiaries receive could be exempt from estate taxes. If the beneficiary is your spouse, the benefits they get won’t be subject to the estate taxes. This keeps your widower from having to pay out a lot of money to the government. They need the money to pay for your final expenses and to live on until they can get things figured out. If the beneficiaries are your siblings or children, the benefits will not be exempt. They will have to include these in the estate taxes.

Loan Collateral

Do you need to get a personal loan for any reason? If so, you can always list your term life insurance policy as the collateral. Most loan lenders want to have a permanent life insurance policy listed as the collateral. Even so, it is generally accepted to list a term life insurance policy instead. Do you have decent credit and a term life insurance policy to put up as collateral? If you do, and the loan company considers you good-risk for paying back your loan, they will likely give you the loan.

Downsides of a Getting Term Life Insurance Policy

You need to know about the advantages of getting a term life insurance policy. With this note, the truth is that this type of policy isn’t good in all situations. Some people would be better having a whole life insurance policy. It is best to speak to a representative at the term life insurance company. This way you can decide if this type of policy is best in your case.

Conclusion

Now you know more about the advantages of a term life insurance policy. You can decide if this is the type of life insurance policy that you need. If you have decided that you want to get a term life insurance policy, there are many options that you can consider. You must decide what benefit or coverage amount to get and who your beneficiaries will be. You will also need to decide what percentage of the benefits each beneficiary will get. Calling to speak to a term life insurance representative to get a quote today could be helpful.

Do you want to ensure your loved ones aren’t left with more than they need to deal with after you die? If so, term life insurance might be something you want to consider. This type of life insurance will stay in effect for a specific time. If you die while your policy is active, the insurance company will pay out the benefits.

Have you been looking to get a term life insurance policy? You already know what policy benefit amount you want. You may also know what company you are using and have chosen the length of the policy. If so, it is time to start working on your application. It is important to know every life insurance company will need different things from you. There is some basic information that all life insurance companies will need.

Listing the Beneficiaries

If you are going to get a term life insurance policy, you will need to have at least one beneficiary on your policy. This is the person who will get the benefits after you have passed away. You can choose one or more people to list as your beneficiaries. You can decide the percentage of benefits that each of the beneficiaries will be getting. For instance, you might want your spouse to get 20% of the benefits. You might want each of your children to get an equal percentage, as well.

You may also need to list a beneficiary, besides the first, in case that person passes away before you do. If this is the case, someone else will need to receive your benefits after you die.

You will need the birth dates and Social Security numbers for each beneficiary you list. The insurance company may also need your beneficiary’s addresses and/or phone numbers.

Frequency of Payments

You will need to pay for the term life insurance policy. On the application, it might ask for your payment frequency. Some of the common options will include paying a lump sum or once a year. They might also allow payments twice a year, quarterly, or monthly. These options give everyone the best option to fit their budget and situation.

Do you have questions about the specifics of your payments? If so, you will need to contact the term life insurance.

Different Life Insurance Policies

Do you have any other life insurance policies? If so, the term life insurance company you are filling the application out for may want to know about these. Do you have pending life insurance policy applications? Make sure you tell the term life insurance company.

You should also let them know how much you are getting or applying for from other companies. Are you trying to get an excessive amount of life insurance benefits? In these cases, the term life insurance representative might need to know why.

Questions Unrelated to Health

There might be questions on the application that aren’t health-related. They might ask if you have had any suspensions on your driver’s license. You might have to state if you have any criminal convictions or moving violations.  If you have ever gotten a DUI, this will need reported. There may be other similar questions, too. Have you answered yes to any of these questions? If so, you will need to write down the dates that these events occurred.

Life insurance companies usually want information that has occurred in the last 3 to 5 years. If you have convictions that are older than what they are asking for, you don’t have to include those.

Risky Activity Plans

The term life insurance company may ask you about plans you have for risky activity.  Do you plan to go scuba diving, hang gliding, skydiving, rock climbing, pilot a plane, or ice climbing? They will want to know about it. They may even ask if you have already participated in any of these risky activities. The more risky activities that you plan to do, the higher your premiums are likely to be. In some instances, you might get a denial due to being high-risk.

You might also have to report whether you are planning to leave the United States. There are some areas of the world that are more high-risk than others. You can check with the United States Department to see which areas are the riskiest.

Family History

You may know the term life insurance company will want information about your health. They may want some information about the health of your immediate family members. too. There are some health conditions, such as cancer and diabetes, that often run in families. Your family history can give the term life insurance company an idea of your life expectancy, as well.

You should include whether your siblings, parents, or grandparents have any health diagnosis. You should state what age these conditions began for your family member. The company may want to know when your family member passed away and their age upon death.

Your Own Health History

The term life insurance company will need to know about your personal health history, as well. Depending on the company you work with, they might want you to get into depth about your health history.

You may have already put your health information in the quote that you requested. You will still need to enter it all into your term life insurance application, as well. The term life insurance company may want to get your medical records for reference. Be sure you are being truthful about your medical and health history on your application.

Many term life insurance companies use something called the MIB Group. This is a database that includes all the health conditions you put on life, health, or other insurance applications over a 7-year period. You may have put a previous personal health history of skin cancer on an application 3 years ago. If you don’t include it on this application, you are likely to get denied.

You can get your personal MIB file to see if it is accurate. All you will need is your name, your primary doctor’s phone number, and address, and when you saw them last.

You should be ready to list all your symptoms, diagnoses, treatments, and dates for all these. The things you need to list include:

• Diabetes
• Cancer
• Asthma
• Ulcers
• Brain disorders
• Mental health disorders
• Anorexia
• Bulimia
• Eye issues
• Throat issues
• Nose issues
• Ear issues
• Any other health issues you have had

Medication List and Substance Use

The term life insurance company is going to want to know the medications you are taking. You should include prescription medications and over-the-counter medications, as well. They will also want to know whether you currently or whether you have ever used drugs or alcohol. If you have ever been in treatment for a substance use disorder, they will want to know about it.

Signing the Application

Once you fill in all the information on the application, you are ready to sign your application. Without signing the application, the document is not valid. This is a legal document. If you have left anything out, you could get a fraud charge.

You can expect the term life insurance company to verify all the information that you have given to them. They could check your medical records, DMV report, and prescription medication records. You can expect them to check your credit history (checking for bankruptcy) and your MIB report. Before you sign the term life insurance application, be sure you haven’t left anything blank. Make sure you were honest through it all.

Completion of the Application

After submitting your application, an examiner from the company will contact you. They will schedule a medical exam with you (if the policy you signed up for requires this). They will allow you to pick a time and place that is most convenient for you. In some cases, you can even have it done at your own home.

When the exam is being done, they will check your weight and height. They will likely want a blood and urine sample. The examiner will likely go over all your health history questions again. You will become an expert in your own medical care by the time you finish this process.

You might be wondering when the policy will be in effect. This all depends on the insurer and when they can get everything they need. It might take them some time to get your medical records (especially if you have a lot of them). They will also need to verify everything that you put into your application.

There might be questions they still have for you. If this is the case, the examiner will reach out to you again. For most people, it can take between 2 weeks – 3 months to get a term life insurance policy in effect after applying. 1 month is the average time frame for this process.

Conclusion

Now you have more information on what you need when applying for term life insurance. You can get everything that you need to start filling out your application. From there, you can submit it and wait for the examiner to reach out to you.

Wondering if there is any difference between term and whole life insurance?

Yes, there is – even a wide one. But first, you need to know why this whole buzzes about life insurance is trending and why you need one.

Death is an inevitable circumstance and, as such you need to plan for the inevitable. You need to protect your family even after your death. And one of the ways to do this is by purchasing life insurance. Life insurance offers lots of benefits to your beneficiaries after your death. Your beneficiaries can use it to pay for funeral expenses, education bills, mortgage, and medical bills.

As you’re about to choose an insurance company, you need to review whole life insurance quotes. Here you’ll notice one common thing – top players in the industry offer permanent and term life insurance products. This is so as they both have their own merits.

Understanding the difference between term and whole life insurance policies is the only way to get it right.

Hence in this article, you’ll figure out the difference between the two so you can make the best choice.

What Is Term Life Insurance?

There are many definitions of term life insurance online but I find this Wikipedia’s definition most interesting. The definition goes thus:

“Term life insurance or term assurance is life insurance that provides coverage at a fixed rate of payments for a limited time, the relevant term”.

From this definition, there are some salient points to note. The term policy will only last for a specific time. This could be 5, 10, 15, or more years. In other words, it wouldn’t last beyond the existing life of the client or agreed term of the contract. So if you purchase this type of policy and the period expires, coverage at the previous rate of premiums ceases. And you only have one option: you either purchase further coverage with different payments or forgo coverage.

While term life insurance lasts for a limited time, it has its own merits. Let’s see what some of these advantages of term life insurance are.

Pros of Term Life Insurance

• Term life insurance rates are less expensive compared to whole life insurance. This is so as the former policy only offers protection for a specific time.
• It’s the best insurance policy for people with young families. Since young families always face lots of financial responsibilities such as caring for the children, saving for college, etc. Term life insurance will save costs on the policy.
• It can be contrasted to permanent life insurance such as whole life, variable universal life, and universal life. This offers fixed premiums for the lifetime of the covered individual unless you allow the policy to lapse.
• It’s simple to understand.
• The death benefit proceeds aren’t subject to federal income taxes.
• It can be used as collateral for loans.

Cons of Term Life Insurance

• The policy doesn’t accumulate cash value.
• It tends to limit what you can buy in coverage as you age. The amount you’re able to purchase when you’re old may be lesser to when you’re young.
• There is a high possibility of premium going up upon taking a new term.
• It’s very difficult to qualify in a situation of serious health issues.

What’s Term Life Insurance Rate Like?

There is no one-size-fits-all for determining term life insurance rate or any type of insurance policy. However, some factors help in determining insurance premiums. To have an idea of what your term life insurance rate will be, here are some factors to consider:

• Gender
• Age
• Health
• Whether you smoke or not
• Life expectancy

For example, your health status is one of the factors that can help you determine your premiums. That’s the healthier you are, the lower your premiums. So in classifying insured people based on health status providers use terms like:

• Super Preferred
• Preferred
• Standard

Term Life Insurance Calculator

It’s always good to have a prior idea of what your life insurance rate will be before approaching a provider. That way, you’re able to determine the financial implication of the policy in advance. While there are many insurance calculators you can use, you can give this term life insurance calculator a try.

Term Life Insurance Quotes

Finding affordable term life insurance quotes isn’t a daunting task as you think. But what’s most important is to understand the trick to finding cheap life insurance. There are especially some things you need to look at in your lifestyle. If you’re serious about getting cheap life insurance quotes, here are some tips to apply:

• Lose weight
• Give up smoking
• Drive safely
• Avoid risky hobbies or activities like sky diving
• Prevent bankruptcy at all cost

What Is Whole Life Insurance?

Whole life insurance is a type of permanent life insurance where the coverage lasts throughout the client’s entire life. By this, it means the policy provides coverage for the entire life of the insured provided he pays the premiums. One of the good things about this insurance policy is that it accumulates cash value. That way, the cash value keeps accumulating in the policy as long as you don’t default the premiums.

Additionally, you can borrow against the cash value if you need to meet an emergency bill. Or you rather use the cash value to settle the policy’s premiums. You can also leave it for your beneficiaries to receive after your death.

However, if you decide to withdraw the policy cash value as a policy loan, then you need to pay back. But where you have an unpaid policy loan, the unpaid amount will be deducted from the death benefit.

While some insurance companies allow for a combination of term and whole life insurance into one policy, others don’t. Some insurance companies offer the privilege to convert a term policy into a whole life policy. That way, you can lock in your current premium rate. This means your premium rate will remain the same for as long as the policy is valid.

That being said, what are the merits and demerits of whole life insurance?

Here are the pros and cons of whole life insurance:

Pros of Whole Life Insurance

• Whole life insurance policy accumulates cash value.
• You can withdraw the cash value as a policy loan to pay emergency bills.
• It’s operated on a fixed premium.

Cons of Whole Insurance

• It’s expensive when compared to the term insurance.
• The death benefit is relatively smaller.

Whole Life Insurance Calculator

Asking how much whole life insurance you need?

Then you need a life insurance calculator to get your answer. The good thing about the insurance calculator is that it gives you an idea of the insurance quote. And when you know this upfront you can plan your savings for the insurance. Although there are many insurance calculators out there you can experiment with this one. (Pls, David you can replace this with your own link if you have one)

Is Whole Life Insurance Worth it?

Whole life insurance is worth it – my personal opinion though. But the question you might want to also ask is when is worth it. Depending on your needs and conditions, whole life insurance pays off for many reasons. For example, it’s worth the investment if you’re looking for permanent coverage. But it may not if you’re looking for a lifelong coverage. So I’ll suggest you first consider what exactly your needs and condition are before making a choice. 

Term and Whole Life Insurance Compared

Comparing term life insurance and whole life insurance isn’t something you can easily conclude on. Because what’s good to one person might appear bad to another. For example, young people will find term life insurance most beneficial as it’s relatively inexpensive. It helps you to protect your loved ones from financial responsibilities like paying funeral expenses, medical, and college bills.

Unlike the term life insurance, the whole life insurance is relatively expensive. However, whole life insurance isn’t without its own merits. It offers a fixed premium and cash value accumulation benefit.

So looking at both sides of the coins, here are some similarities and dissimilarities in both:

Coverage

Although there’s a difference between term and whole life insurance in coverage, both pay guaranteed death benefit when you die. Term life insurance offers coverage for only a specific period of time. But whole life insurance covers the entire life of the insured person.  

Qualification

As with the whole life insurance, you might not need to take medical exams to qualify for the policy. But to qualify for term life insurance policy you’re required to take a medical exam. This is so as the coverage amounts for the term life insurance are very high.

Premiums

Many young people prefer term life insurance policy over the whole life insurance. This is because they see it as the type of insurance policy that offers inexpensive premiums. Although this is true the initially inexpensive premiums is only for when you’re just getting started. Once you’re in, the premiums increase over time. Sometimes you’ll notice the increase when you try to get a new policy. At another time, the increase will come at regular intervals during the coverage period of the policy.

As for the whole life insurance, the premiums are expensive at the initial stage of the policy. But once you’re in, the premium is locked in at affordable rate for the life of the policy. You should try to lock in affordable premiums early. Because doing this will put you at a big advantage as you grow older.

Cash Value

One of the differences between the term and whole life insurance is in the area of cash value accumulation. While the latter builds up cash value the former doesn’t. In fact, one of the comparative advantages of whole life insurance over term insurance is the cash value. In that, you can withdraw the cash value as a policy loan.  You can also decide to leave it and redeem it as a lump sum at any time.

Dividends

Although this isn’t the case with all providers some insurance companies pay dividends to their clients. This is only applicable when you purchase whole life insurance. As for the term life insurance, there are no annual dividends for you. So if you happen to purchase your policy from a provider that offers annual dividends then you’re in luck.

Term or Whole Life Insurance, What’s Best for You?

So you’re ready to take the plunge but not sure why do you need term or whole life insurance. Don’t panic as I have your back. Before you decide which of the two insurance policies will be best for you there are questions to answer. Breaking it down for you, here are some key questions to ask yourself:

• Why do you need life insurance?
• What type of coverage do you need?
• Can you upgrade your current policy? If yes, how?
• If you don’t die, what happens to your policy?
• How much does the policy cost (premium amount)?
• What’s the process for filing a claim? 

Answering all these questions and some other questions are very important before getting started. Because you don’t want to get into it and later find out it’s not the right policy for your situation. And most importantly, certain policies are suitable for certain needs and conditions. For example, a term policy will suit for protecting your loved ones from a loss of income. But it might not be the best for you if you’re trying to cover funeral expenses. In that case, your best choice is to go for final expense insurance – another type of whole life insurance policy. Overall, your situations and needs should take the lead when determining the type of insurance policy to choose.

Wrapping Up

While all the tips above are enough for you to get it right, I suggest you keep this article handy. Read it over and over again. Before you take a leap try and ask all the above questions. But don’t forget to also consider the difference between term and whole life insurance. Finally, with all the tips above taken seriously, you can rest assured you wouldn’t go wrong.

Cheers!!!

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Which type of policy is best for you, term or whole life? The answer depends on several factors, including:

Your Needs. If you need coverage only until your children graduate from college, for example, you might be better off with a term life policy.

Cash-value insurance is better suited for long term needs, such as planning estate taxes and providing lifetime security for your spouse. Some term policies cannot be renewed past age 70 or 80 and can become costly to renew as you approach that age.

The Cost. If term life insurance is more suited to your budget and you want life time coverage, consider a term life policy which can be converted into a whole life policy. Then you can convert the policy whenever your cash flow or needs dictate. You can also purchase a combination of term life and whole life insurance and gradually shift into whole life insurance over time.

Your Savings and Investment Goals. Whole life insurance can be a good long term investment vehicle, especially because the cash value has the potential to grow tax-deferred. Should you no longer need the insurance but want some extra cash, you may surrender the policy and collect the accumulated cash value. Be sure to discuss the tax consequences with your tax advisor first.

As an alternative, you could purchase term life insurance and invest what you save on premiums on your own. Compare the returns you can expect, and remember to take taxes into consideration if you plan to select taxable investments.

So, Should I Buy Term Life or Whole Life Insurance? Term life and whole life insurance both have advantages including immediate family protection. Deciding which type of policy and which features are right for you takes careful consideration and, most times, a comprehensible look at your financial plan. To discuss your life insurance needs and financial requirements, contact your financial professional.