Florida Term Life Insurance
Florida term life insurance guarantees payment of a stated death benefit for a specific period of time or term. Once the term expires, the policyholder can either renew it, convert to a permanent policy, or allow the policy to end. Term life policies have no value other than the guaranteed death benefit. Term life insurance is also known as pure life insurance.
A term policy’s purpose is to insure against the loss of life. This cash from the death benefit may be used by beneficiaries however they choose. All premiums cover the cost of underwriting the insurance, resulting in premiums much lower than permanent life insurance premiums.
Premiums for term life are based on one’s age, health, and life expectancy, which is set by the insurer. If the insured dies within the specified term of the policy, the insurer pays the face value of the policy to the insured’s beneficiaries. If the policy expires before the policyholder’s death, there is no payout.
Types of Florida Term Life Insurance
Level Term / Level Premium
These policies provide coverage for a specified period of time ranging from 10 to 30 years. Both the death benefit and premium are fixed. Because of the increasing costs of insurance over the life of the policy, the premium is comparatively higher than yearly renewable term life.
Yearly Renewable Term
These policies have no specified term but are renewable every year without requiring evidence of insurability. Early on, premiums are low, but increase as the insured ages. Although there is no specified term, premiums can become prohibitively expensive as one ages, making the policy unattractive for many.
These policies have a death benefit that declines each year on a predetermined schedule. The policyholder pays a fixed, level premium for the duration of the policy. They are often used in concert with a mortgage to match the coverage with the declining principal of the mortgage.
Convertible term life insurance is a term life policy that includes a conversion rider. The rider guarantees the right to convert an in-force term policy (or one about to expire), to a permanent plan, without going through underwriting or proving insurability. The conversion rider should allow conversion to any permanent policy the insurance company offers with no restrictions.
The basis for the premium of the new permanent policy is your age at conversion. The advantage is guaranteed approval without a medical exam. Medical conditions developed during the term life period cannot adjust premiums upward. Overall premiums will increase significantly since whole life insurance is more expensive than term life insurance.