Term life insurance provides death protection for a stated time period, or term. Term life insurance is perhaps the simplest form of life insurance. It was developed to provide temporary life insurance protection on a limited budget. Since term insurance can be purchased in large amounts for a relatively small initial premium, it is well suited for short-range goals such as life insurance coverage to pay off a loan, or providing extra life insurance protection during the child-raising years.
In most states, carriers offer term insurance policies providing level premiums for 5, 10, 20, 25, and 30 year periods. These policies can be renewed or continued at higher premiums in most states.
The conversion rights on many term policies guarantee that for a specified period of time and/or up to a certain age, the policy can be converted to a permanent plan for the equivalent amount of coverage without having to provide additional evidence of insurability.Permanent life insurance coverage can be important to your client’s overall financial plan. When your clients convert their term insurance coverage, they can take advantage of several benefits:
- Lock in permanent rates now while they are young and premiums are affordable
- Permanent products offer a guaranteed death benefit and level premiums for the life of the policy.
- Term conversions do not require medical or financial re-qualification.
- The opportunity to build cash value, for loans or withdrawals on the policy to help supplement retirement or other future cash needs.
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