Life & Health Insurance
Critical illness | Long term care | Disability insurance | Term Life Ins. | Health & welfare trust
Term Life Insurance
Term Life Insurance is temporary life insurance coverage. Term insurance is initially the lowest cost life insurance protection that you can buy for individuals, families or businesses. It is designed to cover a variety of temporary insurance needs such as income replacement, loan-mortgage-debt coverage, buy sell, & key person etc. Common premium structures for term products increase the amount of premium payable at the following intervals: 1, 5, 10, 15, 20, 30 years. The most commonly purchased term products are Term-10 and Term-20. Term insurance is also available with level pay periods and coverage periods of 65 and 75 years. Term to age 100, or T-100 may sound as if it is a term insurance plan, is in fact a permanent insurance solution. Term to 100 provides coverage at the same premium through to age 100, with no increase in price.
Generally, coverage can be renewable and convertible (R&C) and renewable and non-convertible (R&NC) up to specified ages depending on the product selected.
Renewable in the sense that the coverage can be kept after the initial term period is over, but at a new cost to reflect the increase in age of the client. Term coverage is usually only renewable to age 75 or 85, or in some case to age 100. At the end of the renewable age, the insurance coverage is generally no longer available. The insurance coverage then expires.
Convertible in the sense that the temporary term coverage can be converted to a permanent life insurance plan with the same carrier. Generally the premium rates upon conversion are higher that the term rates, as the new coverage will be permanent in nature and premiums can be level and payable to age 100 or less and life coverage last to age 100.
Term insurance rates are basically categorized into two areas. Regular (or standard) and preferred. Both regular and preferred underwriting
consider the following factors:
3. Tobacco use
4. Build (height and weight)
5. Blood pressure
6. Cholesterol Level
7. Medical/Family History
8. Alcohol/Drug Use
9. Driving Habits
10. Criminal record
11. Low Risk Lifestyle/Activities
For Clients with better than standard medical history, family history and vital information can benefit from lower rates by qualifying for preferred rates.
There is a wide range of competitive term products that have a host of preferred non-smoker and smoker classifications. They are designed with various rate scales and underwriting criteria and are categorized such as class 1, class 2, class 3 / diamond plus, diamond / elite, preferred, etc. Knowledge of exactly how the client must qualify for the considered rate class is vital and although a client may appear "preferred", only the underwriting process and medical evidence can confirm this.
It is best to manage the client's expectations at the onset by quoting premiums conservatively (using a mid-range class, or "regular" status) rather than quoting the lowest priced top class available. The benefits to this conservatism are avoiding the disappointment of an underwriting decision that is worse than expected and, on the other hand, quoting the client a Class 3 and coming back with a favorable top Class 1 that results in a lower premium!