A term life insurance fact sheet

Term insurance is a type of life insurance that provides coverage for a specific time period. It is not intended to be permanent or kept indefinitely. Term insurance typically offers the largest amount of life insurance protection at the lowest initial cost over the specified term.

Features:

n Largest death benefit for the lowest premium

n Coverage term generally lasts from 10 to 30 years

n Does not build cash value

n Designed for temporary coverage

n Can be renewed at term expiration for significantly higher premiums

n Death benefit is paid income tax-free to designated beneficiary

Primary Uses

n Replacing income

n Eliminating a mortgage

n Funding education

n Paying settlement costs

n Funding buy-sell agreements or other business owner arrangement

Advantages

n Term insurance is an efficient way to achieve maximum life insurance protection for minimal premiums.

n When the need for insurance is short term, term insurance usually is the best alternative because it is the least expensive temporary coverage you can buy.

n Term insurance is beneficial when an individual needs increased insurance coverage but has a limited ability to pay premiums.

n Many term policies can be converted to permanent life insurance if your insurance needs change.

Considerations

n If the policy is continued after the initial term expires, the premiums may be considerably more expensive than permanent coverage.

n New term coverage may be obtained, but the premiums will be based on the policy owner's attained age and current health.

n There is no payout if the term of the policy expires and is not renewed before the insured's death.

n Term life insurance is fully underwritten. Good health matters!

n If the insured's health deteriorates, it may not be possible to purchase new coverage, which subsequently could force the insured to pay excessive premiums or go without coverage.

n When you purchase a new term policy, the contestable and suicide periods start over again. As a result, a death benefit claim during the first two years may be declined.

n Since insurance benefits are subject to the claims-paying ability of the insurance company, it is important to choose a reputable firm.

Article provided by Paul Schluckebier, CFP®, Managing Director/Investments with Stifel, Nicolaus & Company, Incorporated, member SIPC and New York Stock Exchange, who can be contacted in the Owosso, Michigan, office at (989) 494-5474. Visit us at www.schluckebierhood-stifel.com.