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Transcript of Term Insurance
Melissa Jesso - 0681106
Peter Kalpakis - 0679917
Brock Smusiak - 0672877 Term Life Insurance What is Term Insurance? The Death Benefit Non-Renewable vs. Renewable Advantages & Disadvantages Term life insurance is a policy where an individual pays for coverage for a fixed time period, if death should occur during this period, the face value the plan will be guaranteed to the beneficiaries. Who receives the payout? The Basics The beneficiary What does it cover? For beneficiaries
cover loans & mortgages Who Offers this Insurance? Companies?
the costs? What happens if nothing occurs during the time frame? What's Includes in a Policy? WHO?
PREMIUMS / REINSTATEMENT?
RIGHT TO CANCEL?
CLAIMS OF CREDITORS? Thank you for listening! Time to see how much you have learned. What voids the policy? Extended / Paid Up Term Level Term Insurance Decreasing Term Insurance Increasing Term Insurance Renewable Term Insurance Non-Renewable Term Insurance Advantages Disadvantages Solving these Problems How to Cancel? What is a rider? Amount beneficiary will receive if the insured dies while the policy is in force. Term vs. Whole Life
Insurance Term Insurance Whole Life Insurance Only in effect for set period of time
Smaller initial premiums
Premiums typically increase upon each renewal
Does not accumulate cash value, no savings component
Can be convertible Continuous for length of policy holder's life
Larger initial payments
Premiums stay the same
Savings component known as "cash value"
Cannot be converted EXAMPLE policy expires without value at end of the term
suitable for individuals who are sure they will not need coverage after the end of the term
lower price then renewable Guaranteed right to renew the policy for another term without providing further proof of insurability. Premiums still increase.
Usually for shorter term policies, up to a maximum age
Higher premiums due to greater risk of insurer 3 Types Guaranteed Adjustable Something? Guaranteed Table of future renewal rates, cannot be changed
can take a new medical in hopes of getting a better rate Example: Adjustable Sold with proposed renewal rate - can change class rate Example: SUP Features of Term Insurance Convertible Policy holder can convert term to permanent without proving insurability
Death benefit must stay the same, any changes require insurability
Premiums - more expensive than non convertible Example Joint-term Insurance Group-term Insurance Form of life insurance that covers two people
Can only be paid out once
Mainly used by spouses & young families Example: A couple buying insurance to cover their mortgage Offered to a group of people normally by employers or other fraternal providers to members or employees
Due to the pooling of risk over individuals in the group, normally provides a lower premium Example: An employer provides group-term insurance to employees for a term of 30 years Conclusions What should one do? When should one choose term insurance? Why would someone need life insurance? Coverage decreases as expiry approaches
Premiums constant face value (death benefit) decreases over time. Lower premiums are expected throughout life. Example: Gina has just purchased a new home on a 20 year mortgage. In order to ensure that if anything is to happen to her, she purchases decreasing term insurance for a term of 20 years. This insurance will decrease as she pays down her mortgage over the next 20 years. Walter has a 20 year term insurance policy, after 18 years he is diagnosed with a diabetes. Walter can convert his term insurance into whole-life, avoiding the need to do renew his term insurance which would increase his premium at each renewal, or apply for whole life insurance and disclose the diabetes on his medical. Different Time Periods 1 year