Term insurance is as the name implies, it is insurance for a “Term” a period of time. Now this period can be (1, 5, 10,15, 20, 25, 30) one-year, five-years, ten-years, twenty or even thirty years. Term insurance is designed to cover your life in the event of death during the term. For example, if you just purchased a house and the mortgage is for thirty or fifteen years, then term insurance of fifteen to thirty years can cover your life in event you die before the mortgage is paid off. Another example is if you have young children, a twenty year policy can cover your life during their growing years, so your family would be left without your economic participation.
At the end of the term insurance policy, your rates will go up. The reason for this is the term policy locks in your premium at the beginning of the term. So at the end of the term, your rates can go up considerably depending on your age before and after the term.
Therefore if you are buying the term insurance for the purpose of covering your life for the longer term, it’s not to your advantage to buy a shorter term policy. The reason for this is because you will have to pay a much higher premium the second half, if you can even get insured. Depending on the company, you will need to qualify for the term life insurance when you apply the second and third time for the policy. Therefore it is to your advantage to find the right company in the beginning and lock in the coverage for the term of your life you need.
If you have any questions, please have one of our advisors at MyTerm.com go over you needs and current status to find the right policy for you