What is term life insurance (Term)?How to apply for the purchase of a US term life insurance policy?

Term life insurance This type of life insurance product has a very long history, probably since it appeared in 1850 and has continued to this day, and is the oldestLife insurance product category, And it is the prototype and benchmark of various life insurance products that will appear in the future.Therefore, most of the characteristics of term life insurance products are applicable to other life insurance products.

What is term life insurance

Term life insurance, term in English, guarantees the payment of death compensation within a specified period. The specified period is usually 10 years, 15 years, and 20 years.Once the term of the policy expires, the policyholder can renew another term life insurance policy, or switch to a whole life insurance policy, or terminate the policy.Term life insurance provides agreed compensation when the insured dies, usually a large sum of money.The premise of compensation is that the death of the insured occurred within a specified period of time.

Classification of term life insurance products

Even term life insurance has different product categories according to different brands, mainly:

• Term life insurance products with fixed premiums This is the most common type of life insurance product. You pay a fixed premium every year or every month, and your beneficiary will receive a certain amount of compensation after your death.According to statistics from insurance institutions, term life insurance products with a guarantee period of 20 years are the most popular term life insurance products.
• Term life insurance products that renew annually  The advantage of this product is that you have the right to choose whether to continue to renew the contract every year, but the premium is no longer fixed and may be different every year.This product is suitable for customers who need a very short-term guarantee.In general, the cost is higher than that of term life insurance products with fixed premiums.
• Term life insurance products with decreasing sum assured The premium of this type of insurance policy is fixed, but the amount insured gradually decreases over time.Customers who buy such products may wish to deal with debts for a certain period of time, such as a 20-year housing loan.
• Term life insurance products with refundable sum assured This type of insurance policy refunds premiums to customers who have survived the agreed coverage period.Some customers don't like to pay for something that has no return for a long time, and they feel that the money is a waste of money.However, if you want to enjoy the refundable product, you have to pay more.

Premiums for term life insurance

The age, gender and health status of the insured are the main determinants of the calculation of insurance premiums.Depending on the denomination of the policy, a medical examination may also be required.Other common factors that affect premiums include driving history, current medications, smoking status, occupation, hobbies, and family history.

During the term of the policy contract, the premium is fixed.However, as the life expectancy of policyholders decreases, insurance costs will also increase.After the contract is renewed, the policyholder may find that the premium has increased significantly.According to actuarial data in 1980, the average life expectancy of Americans is 78 years.Therefore, the life expectancy of a 20-year-old person is 58.86 years, while the life expectancy of a 50-year-old person is 28.86 years.The risk of providing insurance for a 20-year-old is lower than the risk of protecting a 50-year-old, and the price is therefore different.

Interest rates, the financial status of insurance companies and state regulations also affect premiums.Generally speaking, companies usually offer the following mainstream insurance coverage options: US$100,000, US$250,000, US$500,000 and US$1,000,000.

At present, term life insurance mainly applies for self-service through the Internet, and we provide policyholders with online price comparison and quotation gadgets for reference.

Free online price comparison for term life insurance

Advantages of term life insurance products

Term life insurance products are cheap and simple. Most Americans’ first impression of life insurance is that this thing is expensive.Please check the monthly premium reference table for term life insurance products below, you may be very surprised.And the usual choice is 10 years, 20 years, compensation after death, simple and clear.

1. Death compensation is exempt from tax. Individual retirement accounts may be taxed, social security pensions are usually taxed, 401(k) benefits are taxed, and most retirement compensation payments are also taxed.But the death compensation for life insurance isCompletely exempt from taxYes, to the extreme, tax exemption occurs in 99% of the cases.
2. Life insurance products are exempt from probate. If you die, all your assets need to pass the probate process supervised by the court before they can be passed on to the successor.The probate process may be expensive (such as tax deductions, etc.), or it may take a long time (if the family situation or property handling is more complicated).Life insurance products do not go through the probate process.Your beneficiaries receive the funds directly.
3. Term life insurance products can be converted into whole life insurance products free of charge or conditionally.Most term life insurances automatically include a free term life insurance conversion rider. If you decide to apply for a lifetime life insurance policy in the middle, you do not need to re-insure, and you can directly convert the policy.

Disadvantages of term life insurance products

• Time limit This type of insurance only covers a certain period, such as 10 years, 15 years, 20 years and 30 years.If the insured passes away within the validity period, the insurance company pays the amount of insurance.After the expiration date, because of the older age, it is often necessary to undergo a physical examination before purchasing.
• Single function Term life insurance is mainly used for death compensation.It usually requires the death of the insured to start the payment*.There is no cash value, no savings and investment functions.
• The cost of renewal is high.No matter how old they are, after the insured’s term life insurance expires, the premium must be determined based on the age and physical condition at the time. If the physical condition is poor or has a serious illness, the insurance company may refuse the insurance. If the physical condition is good, because of age Problem, then the premium may double or more than the original. The older you get, the more difficult it is to apply for insurance.

The amount of term life insurance required varies from person to person, and it also determines the cost of your premium.Generally speaking, the larger the insured amount, the higher the premium.Please refer to Term life insurance coverage calculator Refer to the amount of insurance you need.

byAmerican Life Insurance GuideChinese-speaking brokers in the community apply for term life insurance, and priority will be given to major illnesses, major injuries, chronic diseases, etc. without additional costsadditional termsTerm life insurance policy products.

You can also apply for a quotation system through the community’s online regularSelf-service application.

Applicable groups

Due to the characteristics of the length and cost of the guarantee period, term life insurance is more suitable forNeed to be guaranteed for a certain period of time和Relatively limited budgetcustomer of.

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*Other payment conditions of term life insurance are stipulated by the additional terms of different life insurance brands