Life Insurance holder of a policy pays a premium, for a period of time (term life or “pure insurance”), from one to thirty years. Any time, during the term of the policy, if policyholder dies, then beneficiary (beneficiaries) receive payment. Term life is the easiest form of life insurance. At the end of the term, holder may renew their life insurance policy, assuming the policy has that renewable feature. “Free-lock” period usually ten days, after you receive your policy, you have the option to cancel. Before obtaining policy, applicant will have to be medically evaluated, and again upon renewal, to be qualified to obtain term life insurance. However, if policyholder health is poor, may not qualify for this insurance or renewal. The premium amount is calculated, based upon age, gender, health questionnaire, and physical examination, determines the approval of certificate of insurability. Typically there is 30 or 31 days grace period, if a premium is paid late, however if a premium is not paid, then the policy is cancelled. Advisable to include in the insurance policy a provision or rider, which stipulates that if the policyholder becomes totally disabled for a specified period of time, do not have to pay premium, for the duration of the disability.
Renewing term policy, have an increased premium amount, because of the age of the policyholder. Otherwise, Permanent life insurance policy continues coverage, until the policyholder dies. Always good idea, to lock – in a Long Term policy, which premium stays the same, during that time. Most term policy, have the option to convert to whole life insurance or type of insurance policy. This maybe important, if the policyholder health declines, which would make it difficult to renew to term life, but easier to convert to another type of policy. Conversion usually allowed until age 65. Beware insurance agents will more likely, encourage to buy Whole Life Insurance, where the commission is several times higher. Term insurance does not accumulate cash, as with whole life insurance.
When purchasing life insurance, ask your insurance agent for Return of Premium term life insurance. This type of policy, insurance holder pays the premium during the term, and then at the end of the term, receives guaranteed return of total cumulative premium paid on the policy. The term policy only, money is wasted, if the policyholder lives beyond the term life.
(Example: Annual premium = $900: Return of Premium after 30 years = $27,000) The life insurance return premium is Tax Free Income, because the money is return of the amount paid into the policy. Lifeinsurance.Com offers this type of policy – Tele: 866 – 691 – 0100
The Veterans Administration offers term life insurance policy. This policy renews every five years, regardless of health and provides coverage up to $250,000. However, premiums will increase. More information call: 800 – 419 – 1473.
Term life is most suitable for those that have children, provide financial support to their parents, and death may cause serious financial hardship to their family. Beneficiary (ies) would able to use the money to pay off any existing mortgage, debts, funeral expense or loans that the policyholder was paying. Term life provides the highest paid amount to beneficiary (ies).
In the state of Florida, anyone from eighteen to eighty-five years old qualifies for term life. Life Insurance Companies licensed in state of Florida, backed by Florida Life and Health Insurance Guaranty Association (FLHIGA). This association protects policyholders, in case the insurance company goes into bankruptcy. The policyholder is protected up to $100,000 for cash surrender or $300,000 for death benefits. The higher rating an insurance company receives by one or more rating agencies, the more likely the insurance company is financially strong. Contacting the Florida Consumer Helpline: (Tele: 1 – 800- 342 – 2762), determine if the insurance company is licensed in State of Florida.
Average cost for term life insurance, regarding a Thirty Year Old nonsmoker, is $150 – $200 a year with coverage of $250,000. Anyone that quits smoking can save up to 60 percent premium.