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Life and Health Insurance Agency

The protection of a term life insurance policy is limited to the amount of time and benefit value as stipulated in the contract. The benefit amount is only payable if the death of the insured occurs during the stipulated term of the policy and nothing is paid should the insured live beyond the stipulated term of the policy.

There is no cash savings value of a term policy. Also known as temporary or pure protection policy, term insurance offers the maximum amount of insurance for the lowest price. There are different types of term policies available and some term policies have options of renewal or can be converted to a cash value type policy.

• Level Term – The policy premium will increase according to the age of the insured upon renewal.
• Annual Renewable Term – Issued as a one-year term, this policy is renewable without evidence of insurability, for successive one-year periods. The premium will increase with each renewal, and most policies can be converted to a cash value policy.
• Reentry Term – Also known as revertible term. The renewal periods are generally every one to five years on the contingency that the insured can demonstrate evidence of insurability.

• Decreasing Term – Also known as a mortgage protect policy. This policy may stand alone or be written as a rider on a whole life policy. The face value of this policy will decrease over the term as the premium remains constant and by the end of the term the policy has a face value of zero. This policy is best suited for coverage protection on loan obligations. The policy premium is very low because the face value decreases as the rate per unit of insurance increases.

• Increasing Term – Usually written as a rider and rarely as separate policy, the face value increases with each successive premium payment.

• Jumping Juvenile – Also known as a junior estate builder, the policy provides term insurance for children aged one to fifteen years old. At the age of twenty-one the face amount increases to five times the original amount with no increase in premium.

Renewable Features:

• Higher cost due to the chance of adverse selection.
• Generally a one, five or ten year term period.
• Based on attained age.
• Protects the insurability requirement of the insured.
• Usually the term policies have an age limitation of 65 or life expectancy.

Convertible Features:

• Exchange term polcy for whole life without evidence of insurability.
• Exchange is allowed any time during the policy.