December 15, 2020
Term Life Insurance 101
Our Term Life Insurance provides affordable protection for a 15, 20, or 30-year period with options to continue coverage for longer.
Our simple Term Life Insurance options are ideal for individuals, families, and even business owners and partners.
How Does Our Term Life Insurance Work?
Term Life Insurance is a simple and affordable way to protect the people you love. With Term Life Insurance, you pay an affordable premium, and in return, you can secure a large amount of life insurance coverage. As the owner of the policy, you choose who receives the $500,000 if something happens to you.
BetterLife’s Term Life Insurance is “level term”, which simply means that the rate you lock in will NOT change during the 15, 20, or 30-year term you choose. However, your rate can go up each year after the term expires if you choose to keep your policy in place. “Level term” also means that the amount of coverage you choose will stay the same during the entire term (if you purchase $100,000 of coverage, you will have $100,000 of coverage as long as you pay your premiums).
Term Life Insurance is more affordable than other types of life insurance because it protects you for a certain period of time, rather than protecting you for your entire life. With BetterLife, you can convert part or all of your policy to permanent life insurance…more about that below. We offer you the option of 15, 20, or 30-year term policies. That means that as long as you pay your premiums, you are guaranteed to be protected for 15, 20, or 30 years, depending on the policy you choose.
Ultimately, Term Life Insurance is a great option for many situations. For an affordable cost that is often less than your monthly internet bill, you can ensure that the people you love most will have the financial resources they need if something happens to you. Term Life Insurance is a popular choice for young families that are living on a tight budget and have large financial obligations, but it can be a great choice for a variety of other situations as well.
Who Should Get Term Life Insurance?
Term Life Insurance is a great option for anyone who wants life insurance at an affordable price. Also, because of its affordable price, it can be a great choice for people who need a large amount of protection. Some examples of people who may benefit from Term Life Insurance include:
Families with Children
Families often have large financial obligations, such as daycare expenses, healthcare expenses, mortgage payments, and more. Children are expensive to raise, and if one of the parents passes away, it can put a massive financial burden on the surviving parent. A life insurance policy can act as income replacement and provide funds to the surviving parent or caretaker to help pay the bills and raise the children comfortably.
Purchasing a life insurance policy when you purchase a new home can be smart, especially if you have a partner who you want to be able to stay in your home if something happens to you. The death benefit – or the money paid out if the insured person dies – can be used to pay off the remainder of the mortgage, allowing the surviving loved one to stay in the home and relieving the financial burden.
Recent College Graduates
People graduating from college or grad school often have a large amount of student debt. A life insurance policy can help family members pay off your debt if something happens to you. When you are young and healthy, term life insurance rates are extremely low. For example, a healthy 22-year-old woman can get a $100,000 15-year term policy for as low as $10 per month.
Business Owners and Partners
If you own a business, you may want there to be a way for your partner or loved one to purchase your business if something happens to you. Or, perhaps you want to be able to purchase your partner’s half of the business if he or she passes away. Term Life Insurance can provide an affordable way to do that. There are a variety of situations where life insurance can be valuable for business owners, so give us a call and we can walk you through different scenarios and options.
What Does Convertible Term Life Insurance Mean?
All of our Term Life Insurance policies are convertible, which means that you can convert part or all of your policy to permanent life insurance, like Whole Life.* Why is this important? Let’s say at age 35 you purchase one of our 15-year Term Life policies. Then, at age 42, you develop a serious health condition that makes you uninsurable (you won’t be able qualify for most types of life insurance). You would be able to convert your term policy to one of our permanent life insurance policies, regardless of your health status. When you convert, you do not need to go through medical underwriting.
So, when you develop a serious health condition and want to know that your loved ones will always have financial protection if something happens to you, this option can be a blessing. To boil it down, our conversion option provides the option to purchase lifelong protection regardless of your health status.
*Please note: You are able to convert part or all of your policy after the first policy year and before the end of the initial term of 15, 20, or 30 years, or before age 70, whichever comes first.
What Happens at the End of the 15, 20, or 30-Year Term?
At the end of your policy’s initial term of 15, 20, or 30 years (if you have not converted your policy to permanent life insurance), then you have the option to renew your term policy on an annual basis. Your rate will no longer be locked in, and it will be reassessed each year, which means that your rate will likely increase each year.
We strongly recommend that you convert your term policy to permanent protection or purchase another level term policy with a rate that will be “locked-in” for a period of time. Talk to one of our BetterLife agents to explore which options might be best for you.
What Additional Benefits are Available?
Our Term Life Insurance policies offer a variety of “extras” that can be of real value to you. These extras include our Member Benefits and optional riders that can be added to your policy.
What are Member Benefits?
BetterLife is a member-owned company. When you purchase a policy with us, you also become a member. You will automatically be eligible to apply for our Member Benefits, including scholarship opportunities, a benefit that can provide financial help if your house is damaged by a natural disaster, and more. Click here to learn more about our Member Benefits.
What are Riders?
You can choose to add riders to your policy to build in additional protection. One of our riders can be added to your policy at NO additional cost. That is our Accelerated Death Benefit Rider, which allows you to access 60% of your life insurance benefit if you are diagnosed with a terminal illness.
Other riders that can be added to your policy for a small cost include:
Accidental Death Benefit
This rider provides additional coverage in the event of death caused by an accident.
Children’s Term Insurance
This rider allows you to purchase $5,000 to $10,000 of term life insurance for your children (as long as they are 18 years old or younger). The coverage lasts until the child turns 25 or you, as the primary insured person, turn 65.
Learn about all of the riders BetterLife offers here.
As you can see, our Term Life Insurance provides a number of options and benefits that can be of great value. If you are looking for simple life insurance at an affordable price, you can start by getting a customized rate in just a few minutes or contacting us by email or phone.
Policy Form ICC20LT95.