Level term life insurance is yet another option available to consumers looking for a steady level of coverage for a specific period of time.
Premiums will vary, as they are dependent upon factors such as age and current health conditions.
If the primary wage earner in the family passes away, this type of insurance can provide peace of mind, at least financially, for the surviving family members.
Things You Need to Know about Level Term Life Coverage
Unlike some policies that fluctuate coverage over the term of the policy, level term insurance benefits remain the same throughout the life of the contract. For instance, if you were to take out a policy for £250,000, this amount would be paid during the first day of eligibility as well as the last.
The insured can decide if the benefit will go to one person or they would like to split it up between several beneficiaries. This type of coverage is often used as protection to cover an interest-only mortgage. The policy can be purchased for a single individual or spouses may choose joint cover to lower their premium.
If a joint policy is secured, once the first spouse dies, the second spouse is left without cover. He or she will need to secure a new policy in order to have benefits for any surviving family members. It should also be noted that the policy will only pay against one death. For this reason, many couples choose to forego the lower rate and secure individual policies for their beneficiaries on the off chance they both die at the same time or in an accident together.
The use of the benefits are at the discretion of the beneficiary
In many cases, a portion of these benefits are used to cover burial costs as well as paying off existing debt, such as joint credit cards, and mortgage payments.
When trying to decide the level of cover that is needed, it is important to factor in the considerations previously mentioned as well as conditions, such as inflation, household bills, and secondary medical care (if needed). One should also consider future costs, such as educational costs for children that are not covered already.
Do Not Let Current Health and Age Prevent You from Purchasing Life Insurance
One common mistake younger people make is they think they are invulnerable when they are in perfect health. As we all know, a life can be taken tragically in a split second. Without the proper coverage, the surviving spouse or family members can be left with significant financial problems and no way to solve them.
Many younger couples and individuals are deep in debt when they are in their 20s, 30s, and often well into their 40s. It is for this very reason that life insurance is so important. If something tragic were to happen to them at this tender age, what is their spouse do with a new mortgage payment and considerable credit card debt?
On the bright side, life insurance is often much easier to secure and the premiums are significantly less. For just a few pounds a month a young couple can be assured if tragedy were to occur, their partner would be financially sound in the aftermath.
What Affects Level Term Life Insurance Premiums?
As briefly stated above, there are numerous factors that will contribute to the premium paid for this type of insurance. In addition, terms may change over the lifespan of the insurance as the insured gets older. It is quite common for the insurance rates of the policy to be re evaluated after a certain period of time or to have a set increase built into the policy.
Examples of factors for insurance premiums are:
• Health
• Age
• Smoker or Non-Smoker
• Gender
• Length of Policy
• Amount of Coverage
Policies are usually drawn up for either a 10, 15, or 20-year term. However, there are companies that will sell term life insurance policies for both longer and shorter terms than the ones mentioned here. Our comparison tool will allow you to search through all of these policies to find both a term and premium that fits your needs.
We previously mentioned that a premium could come under review. What this means is that at a certain anniversary of the policy (for example, year six of a ten year policy), the insurance company may require the insured to have a physical exam to re evaluate their health conditions. At this time, they may choose to raise the rates in accordance with the information revealed during the review process.
Are Term Life Insurance Benefits Guaranteed?
As with any type of insurance policy, there are some types of exclusions where a payout will not be awarded. For example, a suicide is often included in the terms as grounds for cancellation of the policy. There are also instances of what can be considered fraud that would also nullify a policy, such as someone saying they are a non-smoker to get lower rates when they are in fact a smoker.
Obviously, missed premiums will also make the contract null and void. If there is some type of financial situation preventing you from being able to make a premium payment, it is imperative that you contact your agent immediately to make them aware of the situation and to see if there is anything that can be done to prevent the policy from being terminated.
Is Level Term Life Insurance Right for Me?
For most individuals, this is the preferred type of insurance today. Rates are affordable, in most cases, and the one lump sum payment helps beneficiaries deal with the financial repercussions of the death of a spouse or parent. Even for individuals with health conditions and that are older, Claybrooke has policies available for a variety of needs and budgets.
At a time when family members are already grieving, a term life insurance policy will at least offer them financial security and allow them to cope with the loss of a loved one without worrying about bills, mortgage payments, and the cost of burial.