AFFORDABLE TERM LIFE INSURANCE QUOTES

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Understanding Affordable Term Life Insurance


There are many commercials that pop up on television and radio promoting the value of getting an affordable term life insurance quotes. Now, most people have a clear understanding of what a term life insurance quote entails. However, they may be unaware what the concept of term life insurance centers on. For those that may have a number of questions regarding this form of coverage, the following is a brief overview of what it entails.


As with other forms of life insurance, term life insurance centers on offering a “death benefit.” That is, when the insured dies the beneficiaries will be paid a settlement amount based on the amount of coverage that the insured purchased. Again, this is standard with all life insurance policies. However, term life insurance is different in one respect. Specifically, term life insurance only provides coverage for a certain designated period of time. This timeframe is, of course, the term mentioned in the title of the coverage.


In short, the coverage is purchased for a specified term. When the term expires, the insured has the option of purchasing a new policy. In some instances, it may be the exact same policy at the same price. In other instances, it could be a new policy at an increased price or different terms. And, of course, the insured could also downgrade the policy for a lower premium. Really, this is the major benefit of purchasing a term life insurance policy. A person can save a lot of money on the purchase of a policy since the policies are being purchased in fixed terms.


This makes term life insurance perfect for those that may be on a proverbial budget. Anyone looking to make sure their family is properly covered in the advent of an emergency can take out a short term policy at a reasonable cost. That alone is a huge endorsement for term life insurance.

Term Life Insurance and Guaranteed Renewable Status

What happens if you have qualified for and purchased term life insurance but your health significantly changes? The good news is that the term life insurance plans we quote on this site (we cannot speak for other sites out there) are guaranteed renewable. Let's find out why this is so important to the basic idea of life insurance protection to begin with.

We get the question almost daily, "What if my health changes...can they cancel me?". We can quickly calm the fears by letting them know that their coverage is guaranteed renewable. This means that as long as they pay their premium on time according to the policy requirements, the coverage cannot be cancelled. It would defeat the purpose of coverage to begin with if a term life policy could be cancelled due to health. Keep in mind that you have to be in good health in order to qualify to begin with.

The only kink has to be do with the contestability clause. The carrier may be able to cancel the policy fraud or misrepresentation of material (i.e. important or having bearing on the decision) information can be shown during the application/enrollment process within two years of the life policy effective date. This a strong reason to be honest and complete when filling out the application and during the enrollment process. If you are honest and forthright, you can then rest assured on the the principle of guaranteed renewable protection.

The only other issue is if the company itself goes bankrupt. There are two protections on this front. First, we provide life insurance companies ratings which guides you on their ability to pay life insurance benefits in the future. Secondly, there are State guarantees funds designed to protect you up to a certain level of benefit.

The protection of guaranteed renewal extends through the term or length of the policy. By definition, this only applies for your chosen term period with term life insurance. For example, if you apply for 10 years term, the coverage is only guaranteed renewable for 10 years. After this period, there may be options to renew for a term life rate but not subject to underwriting. Term life rates are primarily based on age at the time of enrollment and guaranteed for the chosen period of time. After that period, you will likely pay quite a bit more. This is why it's so important to plan out how long a period of coverage to choose up front at your younger age. We have an entire article on how to view this question.

Rates can be increased for an entire class of guaranteed renewable policies. This means they can't target you for your specific health status but can change rates for everyone in a demographical group. This is rare with term life insurance and much more common with health insurance (much to the irritation of health insurance subscribers).

The key to guaranteed renewable is that your responsibility is to pay the premium. We strongly recommend an automatic deduction in order to make sure the policy doesn't lapse due to lack of payment. Carriers may also have grace periods to pay premium. It's important to check your life policy or with us as your licensed life insurance servicing agent to know what the payment grace period is. There may also be re-instatement clauses that allow you to re-instate a lapsed policy after paying the back premiums. You never want to be in this situation and in order to keep your guaranteed renewable status, make sure to abide by the policies requirements for payment.

(ArticlesBase ID #1246132)
Dennis Jarvis
Dennis Jarvis is a licensed insurance agent concentrating on term life insurance. Shop, compare, and instantly quote multiple carriers with professional guidance and resources.
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About the Author:
Dennis Jarvis is a licensed insurance agent concentrating on term life insurance. Shop, compare, and instantly quote multiple carriers with professional guidance and resources.

Author: Dennis Jarvis
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