Term Life can be issued for 10-30 years and provides a death benefit to the beneficiary. The policy expires at the end of the term and does not cover living after that point. Most policies will also pay a portion of the death benefit in advance if diagnosed with a terminal illness and less than 12-24 months life expectancy.
New Living Benefit Life policies also include no cost riders that will accelerate up to 90% of the death benefit in case of Critical Illness (Cancer, Heart Attack, Stroke, Major Organ Transplant, etc.); Chronic Illness; Disability; Terminal Illness; or Death. Funds can be used for any purpose, such as: medical bills, lost income, mortgage payments, household expenses, long term care, etc. Living Benefit Term or Permanent Life policies are only available from approximately 6 carriers.
Term Life Insurance covers death by any reason, be it natural (illness or old age) or accidental. It does not cover suicide during the first two years of the policy, and most Term policies exclude death occurring during the commission of a felony and a few other obscure exceptions.
Term life insurance policies have what is known as a contestability period of two years. This two year period allows an insurance company to investigate a cause of death. If the cause of death is a suicide, they will not pay. If they find an omission of health or lifestyle condition on the application and it contributed to the cause of death, they can decline the death claim. After two years, if all the information was true and complete and the cause of death is not specifically excluded, such as "act of war", then every cause of death should be paid.
That is a great question! There seems to be a lot of confusion about what policies cover what. Here is a simple breakdown: Accidental death policies only cover death by accidents, so no sickness, heart attacks, etc. Graded (or modified) policies cover anything, but only pay out the full death benefit after the graded period has elapsed (generally 2-3 years). Term and whole life policies will cover anything, but there can be issues if the death is suicide, or indicative of misrepresentation during the first two years of the policy. Term policies do not cover anything, once the term period has ended. I hope that that helps clear it up for you, please feel free to contact me if you have more questions. Thanks for asking!
Insurance Adviser - Broker, SC Insurance Services, Oahu, Hawaii
Interesting question. Makes me wonder if the above answers address what you meant to ask. So the points covered above are mostly what term life insurance does cover. What term life insurance does NOT cover is the risk of death after so many years as specified in the contract. Hence the "Term" In the name. Also term insurance can't be purchased for a person of 80 or the latest 85 years of age.
Term insurance has no cash value so it doesn't "cover" the need for a guaranteed tax-free growth of wealth like a Whole Life Insurance can. Term insurance can't "cover" the need for retirement income supplement like Whole Life can. As mentioned above no insurance including Term will cover suicide in the first two years of the policy. And of course also as mentioned above there is a contestability period with all life insurance to mitigate deliberate misinformation in order to obtain a policy. If fraud is proved on a claim within the contestability period the claim will be denied.
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New Living Benefit Life policies also include no cost riders that will accelerate up to 90% of the death benefit in case of Critical Illness (Cancer, Heart Attack, Stroke, Major Organ Transplant, etc.); Chronic Illness; Disability; Terminal Illness; or Death. Funds can be used for any purpose, such as: medical bills, lost income, mortgage payments, household expenses, long term care, etc. Living Benefit Term or Permanent Life policies are only available from approximately 6 carriers.
Term insurance has no cash value so it doesn't "cover" the need for a guaranteed tax-free growth of wealth like a Whole Life Insurance can. Term insurance can't "cover" the need for retirement income supplement like Whole Life can. As mentioned above no insurance including Term will cover suicide in the first two years of the policy. And of course also as mentioned above there is a contestability period with all life insurance to mitigate deliberate misinformation in order to obtain a policy. If fraud is proved on a claim within the contestability period the claim will be denied.