Term life insurance is a type of policy that lasts for a specified amount of time. When you reach the end of the term, you have the option of applying for new coverage or letting the existing expire. It essentially means that you pay an insurer a set amount of money for years to come. If you outlive the policy expiration date, the insurer still receives all of the premiums that you paid. With this type of insurance, you can sign up for coverage until you reach the age of 100. Though it might not seem like the best type of insurance, life insurance is important to secure at a young age, and there are some situations in which it makes sense to buy this type of policy.
Who is Eligible?
Anyone can buy one of these policies, however most insurers will not offer coverage for those who are over the age of 75 though because they assume that they will not be profitable on the policy, so that may take a little extra research. You will pay premiums until you reach the age of 100 or you pass away. This type of insurance offers payouts that start at $25,000.
How Does this Work?
Insurers that offer these policies allow you to set the payment that you want your beneficiaries to receive. You can purchase an individual policy for one person or a joint policy for two or more people. Each payment that you make is a premium. Most insurers let you make a lump sum payment once a year or smaller payments every month. If you live beyond the term of your policy, you can cancel the policy outright or look at the options that the insurer offers.
When Does this Make Sense?
Term life insurance makes financial sense when you’re worth more on paper than you are in real life. Let’s say that you have assets that total hundreds of thousands or even millions of dollars. Your beneficiaries are responsible for paying taxes on the assets that they inherit but may not have the cash on hand to pay their taxes. They can use the payout to pay those taxes without needing to sell personal property or other items to raise those funds. Term 100 life insurance is easy to find online from different companies. You can find out more about how the policies work, the type of coverage that you need and how much your premiums will cost.
Payouts for Beneficiaries
If you pass away at the age of 100 or later, your beneficiaries receive the payout listed in your insurance policy. Whether you choose a payout of $25,000, $50,000 or more, your beneficiaries will receive that entire amount. This gives the necessary funds they can use to cover funeral expenses, including the service at the funeral home and the burial in a cemetery. It also provides a financial cushion that they can use to pay for the taxes on your estate. You can customize the policy to pay out in situations where you become injured and cannot work too.