Term-Life

Term-Life Insurance

Term Life Insurance, also known as Term Life Assurance, is a pure death benefit life insurance policy that covers you over a specified period of time and pays out only in the event death. If the policy holder does not pass away during the term of the policy there is no benefit paid. Term Life, which can be renewed on an annual basis and has no investment component, is the simplest and most inexpensive type of life insurance.

“You are three times more likely to suffer a critical illness before the age of 60 than you are to die before that age” – Health Insurance Guide, 2005

When applying for a Term Life policy, the insured is given the option for the cover duration, typically with term lengths lasting 5, 10, 20, 30, or 35+ years. It is important to note that a Term Life policy is more expensive with longer durations since your risk of death increases as you get older.

Term Life Insurance provides a payout to a beneficiary upon the death of the insured. However, unlike other lines of insurance, if the insured survives the term then they won’t receive any benefit. For example, if you died a day after the expiry of the policy, then no payment would be made due to a lapse in coverage. In addition, Term Life has no investment aspect as it is intended solely for death protection.

Term Life is often split into three primary benefit categories – increasing, decreasing, and level – all which are utilized for different situations depending on your own current and future needs. The primary difference in the policies is the benefit:

Decreasing Term Life’s benefit decreases annually with the premium remaining constant, addressing temporary financial risks
Increasing Term Life’s benefit increases over time, typically in line with an index or fix percentage, providing a solution to inflation.
Level Term Life’s benefit remains stable throughout the policy, providing a solution to consistent financial risk

Benefits / Highlights

Life insurance coverage with various term limits at affordable premiums
Pays a death benefit in the event of an untimely demise within the term
Flexible death benefit depending on your own needs
Wide range of optional supplements and riders for your consideration
Typically, can be converted to other life insurance plans
Flexible and simple premium options
Guaranteed renewable for a specified term

Uses for Term-Life Insurance

Unlike many other types of life insurance, Term Life isn’t used for estate planning but rather as a pure protection policy against future costs and expenses resulting from an untimely death. At INLE Risk Management we can design and tailor the ideal policy to fit your needs.

What makes Term Life unique is it’s three primary benefit categories – increasing, decreasing, and level – each of which has a different feature. The different benefits of Term Life Insurance policies are used in the following ways:

Decreasing Term Life is utilized for costs that are decreasing as you get older, such as a mortgage for your house
Increasing Term Life is a solution to inflation, and is used for situations where you can expect big costs in the future, such as university education
Level Term Life is designed for consistent yet temporary needs, paying off a loan in equal installments

At INLE Risk Management we specialize in structuring the ideal and appropriate policy to suit your lifestyle and needs.