Maryland Term Life Insurance

Maryland Term life insurance is life insurance which provides coverage for a limited period of time. After that period, the insured can either discontinue the policy or pay annually increasing premiums to continue the coverage. If the insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is often the most inexpensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis.

Like auto and homeowner's insurance, term insurance only covers you during the time you're making payments. For this reason, it's less expensive than permanent life insurance. For example, a 15 year term life policy only pays the death benefit if you die within the 15 year period. Since term insurance can be purchased in large amounts for a relatively small initial premium, it is well suited for short - range goals such as life insurance coverage to pay off a loan such as mortgages, or providing extra life insurance protection during the child raising years. Term policies can be obtained for 1, 5, 10, 15, 20, 25, 30, 35 and 40 years.

Types of Term Life Insurance

Level Term

A type of term life insurance policy where the face value or death benefit remains the same from the effective date until the expiration of the policy. Level term life insurance also offers a fixed price or premium from the beginning until the expiration of the policy.

Return of Premium Term

A type of Term Life Insurance that provides a refund of all the premiums you have paid during the specified term of the policy. The entire premium paid is refunded if the policy is kept for the entire term period. If the policy is terminated before the end of the term of the policy, a prorated amount which is a percentage of the premiums paid will be refunded. The percentage will depend on how long the policy was kept, and a schedule of return of premium is included in every policy.

Annual Renewable Term (ART).

If your term life insurance is an annual renewable policy, you can renew your coverage each year without filling out a new application or passing a physical exam. However, the premium, or the amount you pay for the policy, isn�t fixed, and goes up each time you renew. Policies with five- or ten-year terms may also be renewable, with comparable increases in their premiums.

Decreasing Term

With decreasing term insurance, the death benefit decreases over a specific period of time, such as 20 years. The death benefit may decrease according to a schedule that fits a declining need, such as a loan balance. The premium, however, remain fixed for the term of the policy.

Increasing Term

A type of term life insurance that provides a death benefit that increases by some specified amount or percentage at stated intervals over the policy term. Contrast with decreasing term life insurance.

No Medical Term Life

No medical term life or often referred to as Non-med term is a Level term life policy that can be obtained without having to take a Para med examination or physical. You simply fill the application, and answer some basic health questions, and the policy is either issued or declined based on your answers to the health questions. No medical term policies can be obtained up to $500,000 worth of death benefit and up to 40 year term, depending on your age when applying. The premiums are generally higher than those of traditional term life insurance.

Group Term Life

Life insurance coverage purchased by an employer for a group of employees. Such insurance is renewable on a year-to-year basis and does not accumulate in value; that is, no cash surrender value is built up. The premiums paid by the employer on such insurance are usually not taxed to an employee unless coverage exceeds $50,000. Most group terms are not portable, which means when you leave the employer, the policy terminates.

Advantages of Term Life

Term life insurance enables you to purchase the most death benefit for the money. If you purchase the return of premium option, the premiums refunded can be tax free. Most term life insurance has a guaranteed conversion option to a permanent life insurance such as a Universal or Whole life insurance, regardless of your health status.

Disadvantages of Term Life

Premiums are only guaranteed for the initial term period, for example in a 10 year term policy, the premium is guaranteed for 10 years. While most term life policies are guaranteed renewable up to age 95, the renewal rates after your initial term period can be substantially higher than the premiums during the initial term period.