California Term Life Insurance
California Term life insurance is life insurance which provides coverage for a limited period of time. After that period, the insured can either discontinue the policy or pay annually increasing premiums to continue the coverage. If the insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is often the most inexpensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis.
Term life insurance only covers you for the length of the policy term, after which time it will expire. Because of this, it is typically cheaper than permanent insurance options, but is not suitable as a burial insurance coverage. There are five different common varieties of term insurance:
- Level Term Insurance - lets you pay the same premium every year for the length of the term and be entitled to the same amount of proceeds if you die during the term. If you want to renew it at the end, your premium may rise significantly, since you'll be older. This is the most commonly understood type of term life insurance.
- Convertible Term Insurance - lets you convert the policy into a permanent one at any time. There's no medical exam, but premiums may go up.
- Non Medical Term Insurance - lets you sign on for a new term policy without a medical exam, although the premium may be higher. This type of policy is a good idea for someone who believes they are in good health, but has not had a medical exam in quite some time, and is afraid that there could be something come up during the medical exam that might prevent them from obtaining insurance.
- Decreasing Term Insurance - pays a death benefit that gradually decreases in value over time. Premiums usually remain the same throughout the term. This type of insurance is sometimes used to cover specific debts where the amount owed can decrease over time, however they tend to be unpopular because by the end of the term length you are paying the same amount for much less insurance.
- Return of Premium (ROP) - option (that builds up like a small whole life policy). In most cases this option can be added on as a rider on a Life Insurance policy providing that, in the event of the death of the insured within a specified period of time, the policy will pay, in addition to the face amount, an amount equal to the sum of all premiums paid to date.
- Accident only term life insurance is a type of term life insurance that covers only in cases of accidental death. Illness related deaths are not covered in any way. This type of insurance is commonly offered as a worksite benefit or as a small add-on to financial instruments, such as a bank account. They typically have large death benefits for very low cost, but the chance of death in an accident is quite low. Furthermore, this type of insurance has a very high rate of abuse, as it is often offered in a misleading way to consumers as if it were a regular term life insurance policy, and the beneficiaries only find out that their family member was not actually insured until after their death.
Many people prefer term life insurance to provide their families with the security they need to cover short term expenses such as college education for children, mortgage payments, and etc. In addition many people find term life insurance to be the least expensive option when they require larger amounts of coverage - typically 100,000 and up.