San Antonio Texas Term Life Insurance Frequently Asked Questions
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What is term life insurance? Term is the lowest cost life insurance product available. Term life typically does not include a cash value or a savings feature. Term life insurance, as the name implies, is purchased for a particular "term" or length of time. Once that term period has arrived and you do not convert your term policy to a permanent plan, your life insurance policy will expire. If the insured dies within the term period, the predetermined death benefit will be paid to the designated beneficiaries.
What are the benefits of Level Term vs. Yearly Renewable Term? Level term insurance includes low premiums and steady coverage over the term of the policy. In other words, your premiums do not go up and your coverage does not go down as long as your premiums are paid and current. "Annual" or "Yearly Renewable Term" offers the lowest initial cost life insurance available. Premiums for this type of life policy will start out very low, however, the premium will increase each year. In general, Yearly Renewable Term policies are most efficient during the first three to four years. If you plan to keep your policy for longer than three to four years, you should consider Level Term.
What can term insurance do for my family and my business? Texas Term life insurance is bought by millions of people for a number of reasons. Families use term life insurance for security. In case the insured passes away, your policy insures there will be money to use to pay for your home, college, outstanding loans and other major expenses. Small business owners use this type of insurance as low cost debt protection to cover notes, lease obligations, business real estate mortgages and other expenses.
Business Partnerships can often use term life insurance to buy out partners in the event of their death. For example, the deceased's beneficiary receives the insurance proceeds and the ownership in the company is then transferred to the remaining partner(s).
Corporations use term life insurance for stock purchase redemptions. In this case, the corporation receives the insurance proceeds and buys back the stock from the deceased's beneficiary, normally the surviving spouse or estate. For businesses, term insurance can provide real benefits for the beneficiaries with no negative cash flow impact on the company.
How is an individual rated? Individuals are rated by their age, health history and in some cases, by their careers. Younger people generally have lower premiums.
What riders are available? Riders or options are available at an additional cost with some policies. These may include:
Waiver of Premium Rider (WPR) If you become totally disabled prior to age 60, the premiums are waived.
An Accidental Death Benefit Rider (ADB) will activate if the insured dies from accidental death prior to age 70.
Child Protection Rider (CPR) You may add your children to the policy and the premium is the same no matter how many children are covered.
Accelerated Benefit Rider (ABR) This allows a one-time lump sum payment of up to 25% of the base policy benefit, with maximums typically of $25,000 for terminal illness with less than six months to live, major organ transplant (heart, lung, liver, pancreas) or nursing home confinement for the remainder of the insured’s life.