Term Life Insurance FAQ

Term life insurance is a life insurance policy purchased for a term of years. For example, some people have these policies for a term of 10 years. After the agreed term has lapsed the policy expires.

If the person dies during this term the beneficiary or estate receives the amount insured of the person’s life.

Depending on which insurance company you are interested in proceeding with, there is no maximum amount for term life insurance that you can take out if you have an income.

If your occupation is considered ‘home duties’ then there is a maximum for term life insurance of 1.5 million but of course, this is dependent on the insurance company and may slightly alter.

If you want to alter your insurance plan in any way, they need to re-assess your personal circumstances again, as it is a new risk to the insurance company to offer you a longer term life insurance policy.

If you are interested in a longer term life insurance plan, you should consider a life insurance policy as these are guaranteed to be renewable until age 99, next birthday. They can also be cancelled at any time.

If you were to live past the term of the term life insurance plan that you have, the insurance company would not refund the premiums paid over the term or pay out the amount insured. The reason for this is because the insurance company takes on the risk of protecting you over the term of the term life insurance.

The insurance company will only pay out the insurance if you were to pass away during the term of the term life insurance cover.

Term life insurance is specific to insurance on your life. It does not pay out upon disability. A term life insurance plan would consider a claim of a terminal illness and potentially pay out the amount insured; it depends on the details of the claim.

Term life insurance cover is based on a client’s age, gender, smoker status, occupational details, medical history and habits & lifestyle. Within an application, there is a list of questions which relate to these things. From there, the insurance company underwrites the insurance application and depending on what is disclosed within an application will determine whether or not the client is eligible for the term life insurance cover.