Term life insurance can be the easiest and most straightforward type of life insurance policy. These policies have term lengths that can range anywhere from five years to age 100. The following are seven term life insurance facts you should be aware of:
1. Premiums are based on the insured’s age, gender, and smoking status. All things being equal, the older the insured, the higher the premium, and males always pay more than females. Other variables that can influence the insured’s premiums are the type of plan and the length of the term. Longer term policies have higher initial premiums than those with shorter terms.
2. Life insurance companies who are members of Assuris carry an additional guarantee in case of insolvency. Assuris guarantees the greater of 85% of either the policy face amount or 200,000 in case the insurance company becomes insolvent.
3. Term life policies come in two types, level term and decreasing term. Level Term policies have a level death benefit and level premiums for a stated term. A decreasing term policy has a decreasing benefit and a level premium for the stated term. Level Term policies have a higher initial premium than Decreasing Term plans.
4. Smokers pay more than non-smokers. Smokers can pay anywhere from 50% to 100% more than non-smokers on their term life insurance policies. The reason is that the insurance company deems smokers a higher risk than non-smokers.
5. Most term life policies have a conversion feature. The conversion feature on Term Life policies allows the insured to convert to a permanent plan without additional evidence of insurability.
6. Applicants with serious health issues may want to consider a simplified issue term policy. Simplified issue term coverage traditionally comes with a higher premium than traditional term life policies, but there are no medical tests and a short series of health questions
7. Multi-life term policies, allow the individual to pay a single policy fee. Many insurance companies allow the applicant to cover two spouses under one policy. This results in the insured saving money on the policy fee, which can range anywhere from $30 a year to $100 a year.
For more details on Term Life Insurance in Canada, please contact us at 1-866-899-4849 or visit our Term Life Insurance Instant Quote Page.
