Effects of Corona virus on Term Life Insurance
Term life insurance is a type of life insurance. It guarantees the payment of a particular death benefit when the insured individual dies during coverage period. The insured individual can either renew the policy upon its expiration or they can transition the temporary status of policy into a more permanent one. They can also let the policy expire upon the end of term.
How Does Term Life Insurance Work?
If you buy this insurance, you will be required to pay premium by the insurance provider. The amount of premium is decided by your age, gender, health and value of policy. Insurance provider may also require a medical examination to be performed.
The insurance agency will pay your beneficiaries if you die during the term of policy. This fund is not taxable. It can be used by your beneficiaries to pay for your healthcare, funeral costs, debts, mortgage payments and much more. You will receive no funds if there if your policy expires before your death. The policy can certainly be renewed. However, the premiums will once again be recalculated at the time of renewal. The savings component of whole life insurance does not apply to term life insurance. It has no benefit other than a guaranteed death benefit.
What are the Costs of Life Term Insurance?
This insurance is usually regarded as the cheapest form of life insurance. A typical healthy 35-year-old individual can obtain whole life insurance with a face value of $250,000 at possibly $200 to $300 per month premium. The same equivalent in term life policy can be bought at only $20 to $30 per month premium rate. The rates offered can be affected by Interest rates, the financials of the insurance company, and state regulations.
What are the Types of Term Life Insurance?
1) Level Term Life Insurance
It provides coverage during a specified period ranging from 10 to 30 years. The death benefits and premiums are fixed in this policy. This type of policy generally carries a relatively higher amount of premiums.
2) Yearly Renewable Term Life Insurance
These policies have no specified term. They can be renewed annually. The premiums change with every renewal. The calculations are made to accommodate slight changes in several factors every year. This policy can become increasingly more expensive as the individual ages. That is why this policy is generally regarded as an unattractive choice.
3) Decreasing Term Life Insurance
This policy has a death benefit that declines on an annual basis. This decline comes at a predetermined schedule. The amount of premium does not change in this policy. It is occasionally used in concert with a mortgage to match the coverage with the declining principal of the home loan.
How is Term Life Insurance Affected by Coronavirus?
Generally, the currently active life insurance policies have not been affected by coronavirus. Any insurance firm cannot make any changes to an active policy regardless of the circumstances. However, any new policies will feel some effects.
If you wish to buy a new term life policy during current circumstances, you should know that the premium rates are determined by the health and medical history of an individual. But that is not all, the rampant virus will also affect the premiums. The costs will undoubtedly increase, especially for those individuals who are more at risk of contracting the disease.
SG Financial Inc. is the best carrier to provide you with Term Life Insurance Policy in Dallas, Texas. Our services are tailor made to suit your needs. They are cheap and guaranteed to pay out when the time comes. Avail a term life policy now. You never know when the disease may strike and take you away from your loved ones. It is better to be prepared.