Life Insurance 101 - 
Let’s clear up some questions.

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We’re looking at some of the most common questions people have about life 
insurance and how it works.

What types of life insurance are there?

There are two main types of life insurance coverage, term and permanent. Simply put, term coverage is temporary life insurance, while permanent coverage is for life.

What is the “term” in term life insurance?

The “term” in term life insurance refers to the temporary period of coverage selected by the policyholder. Typical term life insurance plans have a 10, 20 or 30-year term length that you can choose. During the term, you are completely covered, and if anything happens to you, your beneficiaries will receive the full plan benefit tax-free.

What happens at the end of the term?

You can choose to renew your term coverage for another set period at the end of the term at a new rate. When you decide to renew your plan, it often doesn’t require a medical exam to be approved. The next option is to simply let your policy lapse.

Do the premiums fluctuate throughout the term?

No. Premiums are guaranteed to remain fixed for the duration of the selected term.

What does the “simplified” in simplified life insurance mean?

Simplified life insurance, like the name suggests, is life insurance simplified. The “Simplified” name refers to how much easier the application process is than traditional life insurance. With simplified life insurance, no medical exams are required to apply, making applying for coverage much more streamlined and faster. People who’ve had trouble with traditional plans or those who just want a more streamlined application, typically go for a simplified life insurance plan.

Are there waiting periods with a simplified life insurance plan?

Some simplified plans provide you with full coverage the same day you apply for and purchase the policy. But other simplified options typically come with a standard 2-year waiting period. If you should pass away during this time, there is a full refund of premiums paid out instead of the plan’s benefit.

What is a beneficiary?

A beneficiary is a friend or loved one you choose to receive your plan’s tax-free benefit if you pass away while your policy is active.

What is a death benefit?

A death benefit is a name for the amount of coverage your plan provides. Should you pass away during your coverage, the policy pays out this benefit to your selected beneficiaries. Your beneficiaries can choose to use this benefit in any way they wish.
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