What to Find in Term Life Insurance | Pacific Wealth Solutions

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FAQs: What Should I Look for in Term Life Insurance?

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Woman holding paper umbrella over cutout of family and house on fresh grass, closeup. Life insurance concept

Getting term life insurance coverage is a good step to take in solidifying your loved ones’ financial stability should you pass away in the next 20-30 years. 

It’s very common, though, to have a lot of questions about what to look for in term life insurance, what’s the best way to buy term life insurance, and more. That’s why Pacific Wealth Solutions has gathered these most frequently-asked questions. 

What Should I Look for in Term Life Insurance?

Here’s what you should look for in a term life insurance policy:

  • Low premiums
  • A large payout
  • The option to convert to permanent insurance before your policy ends
  • No requirement for a pre-approval medical exam (preferred)
  • The policy itself is insured by the Life Insurance Guaranty Association (see “What Should I Look for in an Insurance Company” below)

What Types of Term Life Policies are Available?

There are typically three types of term life insurance policies:

 

  • Level-Premium is the most common and best choice for most people with premiums that remain constant throughout the term.
  • Renewable gives the option to renew after the term ends. Premiums will likely increase, but it may be helpful for people who want a short extension. 
  • Decreasing policies have a payout that lowers as the expiration of the term gets closer. This is used when there is significant debt that is being paid off over time, deeming a higher payout unnecessary.  

 

What Are the Different Term Life Policy Options?

Some term life policies offer extra options (“riders”) for an additional cost. Examples include:

 

  • Return of Premium for individuals who want a refund of the premiums paid back to them when the term is over. This option is expensive at >30% above the cost of a standard policy.
  • Accelerated Death Benefit allows you to get some of the payout (25%-95%) before you die. Qualification for this option depends on if you are terminally ill, have a serious illness that may reduce your lifespan, or permanently require long-term care.
  • Accidental Death Benefit doubles or triples your payout if you die from a strictly-defined accident. 
  • Disability Waiver of Premium allows you to stop making payments if you become disabled for six months or longer.

 

Does Term Life Insurance Cover COVID-19?

Yes, most policies pay out if you die from COVID-19 as long as it isn’t a pre-existing condition. 

Another important thing to note is that many insurance companies are offering a premiums deadline extension if you have been laid off or furloughed from work. 

What Is the Best Way to Buy Term Life Insurance?

The best way to buy term life insurance is to follow these simple steps, and then an agent will do the rest:

  • Determine how many years of coverage you want. Most people choose the length of time until children are no longer dependent and all major debt is paid off.
  • Calculate how much insurance you need. To get an estimate, add up your income during the coverage term, debt, funeral costs, and college costs for any children.
  • Consider the type of policy and any options you may want.
  • Name your beneficiaries.
  • Compare quotes and contact an insurance agency.

What Should I Look for in an Insurance Company?

When speaking with an insurance agency, you want to look for a few other things than just a cheap premium. You want a company you can trust with your money and the financial future of those you love. 

Ask people you trust for their referrals. Next, take a look at their complaint, financial, and licensing reports. These can be found through the National Association of Insurance Commissioners.  Finally, check to make sure the company is a member of NOLHGA, which guarantees that your investment is protected should the agency go out of business before your policy’s term ends.

It’s time to start prepping for your family’s future. Request a free quote to begin the simple, no-medical-exam-required application process!

Step 1: Apply Now

Step 2: Create an account.

  • Manage your policies and investment accounts.
  • Get help from MassMutual directly, or you can always contact PWS via live chat or email on our website.
  • Set preferences and notifications. Get helpful financial resources.

Step 3: Submit the application.

  • Sign in to your account and finish your application. 
  • Submit the application and wait for the approval.