Q: What are the 3 types of term life insurance?

Level Term: Provides a fixed death benefit and premium throughout the term, making it easy to budget. Decreasing Term: Features a death benefit that decreases over time, often used to match the decline in a mortgage balance. Renewable and Convertible Term: Offers the option to renew the policy at the end of the term or convert it to a permanent policy without a medical exam.

Q: What are the disadvantages of term life insurance?

No Cash Value: Term life insurance does not accumulate cash value, so you don’t receive any money back if you outlive the policy. Limited Coverage Period: Once the term ends, coverage expires, and if you want to renew, premiums may increase based on your age and health. Potential for Higher Long-Term Costs: If you renew multiple times or purchase new policies, the cumulative costs can be higher than a permanent policy.

Question 1

What is term life insurance?

Accepted Answer

Term life insurance is a type of life insurance policy that provides coverage for a specific period, typically ranging from 10 to 30 years. If the insured individual passes away during this term, their beneficiaries receive a death benefit. It is often more affordable than permanent life insurance, as it focuses solely on providing a death benefit without accumulating cash value.

Question 2

What are the 3 types of term life insurance?

Accepted Answer

Level Term: Provides a fixed death benefit and premium throughout the term, making it easy to budget.
Decreasing Term: Features a death benefit that decreases over time, often used to match the decline in a mortgage balance.
Renewable and Convertible Term: Offers the option to renew the policy at the end of the term or convert it to a permanent policy without a medical exam.

Question 3

What is better, whole life or term life insurance?

Accepted Answer

The choice between whole life and term life insurance depends on individual needs and financial goals. Term life insurance is typically more affordable and is ideal for those who need coverage for a specific period, such as while raising children. Whole life insurance provides lifelong coverage and includes a cash value component but comes with higher premiums. If you seek investment benefits and lifelong coverage, whole life may be better; for temporary needs, term life is often preferable.

Question 4

What are the disadvantages of term life insurance?

Accepted Answer

No Cash Value: Term life insurance does not accumulate cash value, so you don’t receive any money back if you outlive the policy.
Limited Coverage Period: Once the term ends, coverage expires, and if you want to renew, premiums may increase based on your age and health.
Potential for Higher Long-Term Costs: If you renew multiple times or purchase new policies, the cumulative costs can be higher than a permanent policy.

Question 5

What is the age limit for term insurance?

Accepted Answer

There isn’t a specific age limit for term life insurance, but most insurers have age limits for issuing new policies, typically ranging from 18 to 70 years. Coverage options and premiums may also vary based on the applicant's age and health status. It's advisable to check with individual insurers for their specific age requirements and policy options.