Defining Term Life Insurance By Sarah Martin At Isnare.com Ezine Articles

If you look to the dictionary to define term life insurance you will find that it is “life insurance for a specific period of time." Furthermore, this type of insurance only pays out at the time of your death so that if you outlive the term, you need to look for a new policy or renew the previous one.

You must make annual premiums for the life of the term in order to keep the policy up to date. Some companies will allow you to make monthly payments on the premium but you do have to check to make sure that no finance charges are added, which will increase your cost.

When you delve further in trying to define term life insurance (http://www.equote.com/li/termlifeinsurance.html), you will see that there are certain factors that determine the cost of such a policy. These include:

•Your age – the younger you are the cheaper it will be

•Your gender – females receive cheaper policies because they have a longer life expectancy

•Your health – some medical conditions may affect your ability to obtain life insurance

•Your occupation – if you work in a dangerous career, you will have higher premiums

•Your lifestyle – if you smoke, are inactive or take illicit drugs you will also incur a higher price for term life insurance

You cannot try to mask the truth when you take out term life insurance. If you do smoke and say that you don’t, if your death is attributed to a disease caused by smoking then the insurance company would be within its rights to deny any payout of the death benefit.

This is a fact you don’t learn when you define term life insurance. In order to get the best policy for your needs at the lowest price, you should be truthful on your application and have a medical examination to prove that you are in good health, although some term policies offered will be no medical exam life insurance (http://www.equote.com/li/nomedicallifeinsurance.html) policies.

Another fact that you don’t learn when you just want to define term life insurance is the difference between level term and decreasing term insurance. Level term life insurance is the most common option because you pay the same amount of premium for the same coverage over the term of the policy. Decreasing term insurance is most often used when you only want enough insurance to repay your mortgage should you die before it is paid in full and you don’t want to leave your family with this burden.

You can take out such a policy for the length of time you have remaining on your mortgage and for the outstanding balance at the time. The amount of the death benefit decreases in increments over this term so that the payout at the end of the term could be nil. This is fine if you just want to make sure you have enough coverage for your mortgage.

One of the clauses that many people like to have in their term life policy is that of waiver of premium. It is important that you ask the agent to define types of life insurance with respect to this clause before you just accept it.

It will incur a higher premium and while it does mean that if you get sick or are injured during the term of the policy to the point that you cannot work and earn a living, your premiums on the policy will still be paid for you. The fact is that the conditions affecting this type of payout are so strict that you basically have to be paralyzed before it can come into effect and you would be paying extra premiums for nothing.

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