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What is Term Life?

 Term life is temporary life insurance that lasts for a specific period of time (or term). The most common term lengths are 10 and 20 years, but policies can be issued for term lengths from one year to 40 years, or to a specific age, such as 65 or 100. If you have any questions, please contact us.

What does Term Life cover?

If the life insured dies during the term of the contract, the death benefit is paid out tax-free to the beneficiaries named in the policy. As long as premiums are paid, the policy cannot be cancelled by the company.

Uses of Term Insurance?

Income protection: provide your loved ones with a death benefit payout that can help to replace your income if you die

Mortgage protection: a death benefit can help your surviving spouse pay down the mortgage, or invest the proceeds and continue regular mortgage payments

Debt protection: a term policy can help to reduce or eliminate any outstanding debts at the time of your death, such as credit cards, car loans, or lines of credit

Education protection: when a parent passes away, the surviving parent may not be able to save enough to pay for their children’s education. Life insurance can provide a payout that can help ensure that your kids will be able to go to postsecondary school

Business protection: term life policies can help business owners protect against the expenses that can arise if an owner passes away

Types of Term Insurance?

Simplified/Non-Medical Term Insurance

Many companies offer this type of term insurance, that doesn’t require medical evidence of insurability.
Premiums can be higher than traditional term insurance, especially if you are in very good health.

Express Term Insurance

Applicants’ eligibility for this type of term coverage is determined with a simple questionnaire.
You can be instantly approved provided that you are in good health.

Single Life Traditional Term Insurance 

One person is insured for a specific period of time.

Joint First-to-Die Term Insurance

Two people, often spouses, are insured under one contract for a specific period of time.
The death benefit pays out tax-free to the surviving life insure, and the policy is then cancelled (though there may be an option for the survivor to convert a portion of the coverage to permanent insurance).

Joint Last-to-Die Term Insurance

Two people, often spouses, are insured under one contract for a specific period of time.
The death benefit pays out to a named beneficiary (or to the estate) when the second life insured dies.
This type of policy is often used to insure against the tax liability that arises when a second spouse passes away.

Business Term Insurance

This type of term insurance can help protect against the loss of a key person in the business, or to fund a buy-sell agreement when an owner passes away, helping to ensure that the business can continue to grow and thrive.

Benefits of Term Life 

Flexibility: Many different term lengths are available, and optional benefits can be added to further customize your coverage

Guaranteed Premiums and Coverage: Over the term defined in the contract, premiums are guaranteed. As long as required premiums are paid, your coverage is guaranteed over the specified term.

Affordability: Term policies generally have lower premiums than permanent policies

Renewability & Convertibility: When applying for a term life policy, you will have the option to choose a renewable term, as well as a policy that can be converted to a permanent plan in the future.

Optional Benefits and Riders 

Many different supplementary benefits can be added on to a term policy, meaning that your policy can be customized to meet your specific needs.

Premium Waiver Benefit

Under this benefit, the insurance company will waive premium payments on the policy if the life insured becomes totally disabled

Accidental Death & Dismemberment Rider

Under this benefit, the insurance company will pay an additional benefit if the life insured dies as the result of an accident.
The insurance company will also pay out a specified lump sum if the life insured, as the result of an accident, loses a specific body part or body function. Generally, these benefits will only pay out if the loss or death is the result of an unexpected traumatic or violent event, and there are some other limitations

Child Rider

This rider will insure dependent children (biological, adopted, or step-children) for a specific amount. Coverage usually continues to a certain age, such as 21 or 25. These riders can generally be converted to permanent, stand-alone policies

Critical Illness Benefit

This benefit pays out in a lump sum if the life insured is diagnosed with a critical illness as defined in the contract. Adding this benefit to a life policy may be more cost-effective than purchasing a stand-alone CI policy.

Is Term Life Insurance Better Than Mortgage Insurance?

Generally, we don’t recommend traditional mortgage insurance. The main reason for this is that, while your outstanding debt decreases over time, your premiums remain level. This means that your coverage amount also decreases over time, so you’re paying the same amount for a decreasing amount of coverage. 

Let’s assume that you have a $250,000 mortgage. Traditional mortgage insurance covers only the outstanding balance, so if you’ve paid off $100,000 of your mortgage before you pass away, the policy will pay out only $150,000. If you opt for a term life policy instead, the full $250,000 will pay out regardless of how much you owe on your mortgage. 

Our other concern is that mortgage insurance isn’t always a guaranteed payout. There have been many cases where mortgage insurance claims have not been paid when an insured person passes away. With term life, your payout is guaranteed (with a few exclusions in the first two years of the policy).

While both traditional mortgage insurance and term life insurance can cover your outstanding mortgage when you pass away, term life is a better value for your money, has a guaranteed death benefit, and may provide your family with extra funds that they can use for your final expenses, debt, education for your children, or other expenses.

Why are people flocking to online insurance?

Choice, flexibility, and convenience. Gone are the days where one insurance company has the best of everything. Let us take care of your due diligence and find the right coverage with the right company.