Maryland Term Life Insurance

What is term life insurance and which is better?

Term life insurance is temporary coverage life insurance, offering a death benefit payable during a given number of years. This is where it derives it’s name “term”, referring to the idea that the coverage is only good for a certain length of time. The most common lengths of time are anywhere from 10 to 30 years of coverage. Term offers much cheaper cost of insurance due to its temporary nature, therefore allowing more coverage to be purchased for less premium. Many see this as the best value for coverage, especially when staying within a budget. There are those however who see the various benefits of Whole life insurance as a better option. We weigh which insurance is better, term or whole life, here.

Does Term Life Insurance have cash value?

When paying for a term life insurance policy, you are essentially paying the exact calculated cost for that amount of insurance and duration of coverage based on that applicant’s age and health risk. This costs is the barebones amount the insurance company has deemed appropriate to allow them to continue to profit and be able to pay claims. Due to this, there is NO money left over to collect within a sub-account. At best there are return of premium policies, where after the expiration of coverage the company returns your premiums paid, sometimes with interest. This is often compared to paying cheap rent on a home you do not own just to have a roof over your head (term), versus making mortgage payments on a home you own that builds equity (whole life).

What is term good for and do I have to wait 2 years for coverage?

Term is best used to cover sums of debt and income that puts loved ones or a business at risk but only for a limited period of time. Debt gets paid off and children become self sustaining adults. This coverage can be used to match up the exact amount of time and death benefit you anticipate needing before the risk abates. One common use of Term life insurance in Maryland is to cover mortgages so that families can maintain homes if income earners pass. The average size of a mortgage in Maryland is roughly $486,000. With that much coverage needed, but only for 20-30 years, a cheaper temporary policy like term is perfectly designed for such a need.

Almost all term policies are contractually obligated to pay death claims immediately. What the two year period refers to is the contestability period afforded to all insurance providers who issue life insurance in the U.S. What it means is that if an insured was to pass in the first two years, the company has the right to investigate the death to make sure it was not apart of some sort of scheme, lie, or misrepresentation that might unjustly defraud the company. This initial period is not of concern for those who complete the application process truthfully with the help of an educated advisor.

How much does term life insurance cost?

Like all life insurance, the cost of term depends on various health, lifestyle factors and of course the type and amount of coverage. Age, illness, disease, accidents, occupation, tobacco usage and hobbies all create a health profile on the applicant that heavily determines how much the cost will be. Here are a few tips to avoid catching a higher rate during the application process. We have put together a detailed analysis of the cheapest term life insurance policies available today based on Maryland demographic averages.

Can you get Living Benefits with Term Life Insurance?

Modern policies now offer a suite of additional benefits called riders. The most popular group of riders are referred to as living benefits. The price difference between a traditional term policy and one with living benefits are minimal compared to the added value received. There is usually a more extensive underwriting process to be approved for such benefits, but plans can be issued without having to give a full medical exam.