Term Life Insurance is the most basic and low-cost type of policy you can buy. It lacks the bells and whistles found in permanent insurance policies – but in my humble opinion, these are usually unnecessary!
Guaranteed term life insurance isn’t difficult to understand, but most agents only ever learn about the benefits, not the nuts and bolts of how it really works.
In this article, I will explain everything you need to know to give you a better understanding of guaranteed level term life insurance.
Table of Contents:
What Is Guaranteed Level Term Insurance?
Guaranteed Level Insurance is a form of term life insurance where the premiums are guaranteed to remain the same throughout the policy’s term.
This guarantees that you pay the same price, regardless of how long your policy is active.
Guaranteed Level Premium Life Insurance vs Guaranteed Issue
So guaranteed level insurance refers to level premiums and a level death benefit.
However, it’s important to understand that there is another type of guaranteed life insurance known as Guaranteed Issue Life Insurance.
With a guaranteed issue policy, even if you have terminal cancer, you’re guaranteed to qualify. (although the premiums will be astronomical)
Guaranteed Level Insurance vs. Whole Life Insurance
Guaranteed Term Life insurance differs from Whole Life in that it’s used to cover specific periods of time, whereas whole life insurance is designed to build cash value and cover you for your entire life.
I typically endorse Universal Guaranteed Life insurance rather than Whole Life insurance. For more information, check out my article on Universal Life Insurance.
Best Providers of Guaranteed Level Insurance
Below we provide a review of 3 companies which offer rates through their own online quote search engines:
With AIG Guaranteed Level Term Life Insurance you can target a policy that is unique to your personal circumstances.
Policy options are available in 17 different policy term lengths from 10 – 30 years.
The AIG search option “Select-a-Term” allows you to customize for almost any situation, benefit amount or length of time.
However, AIG does not search the entire market when it comes to finding the best rate for certain health issues.
Also, another drawback is that AIG Direct provides service through a high volume “call center. Their agents are required to meet quotas, so expect high-pressure sales tactics.
AIG allows you to customize your Level Term Policy for almost any situation, benefit amount or length of time to fit your personal circumstances.
5 out of 5
Zander Insurance has an easy to use quote engine. However, a variety of users have found that this agency also employs only a limited number of insurers.
If you use their online quote search option, you may find that you only get a finite number of search results and may not find the best quotes at the lowest rates.
It has, however, been found that they do have the best carriers when it comes to smokers and other health issues.
AARP specializes in providing term life insurance quotes to people who are 50 years of age and older.
The quotes they offer are for “Level Benefit Term Insurance” and “Extra Protection Term Life Insurance.”
The first problem with AARP quotes is that the level term insurance they offer, increases in price every 5 years.
With other life insurers, rates generally remain the same for the life of the term – we really do prefer Guaranteed Level Term Insurance.
Overall the rates you are quoted on this site may not be the best, especially if you are in good health.
If you are interested in the top overall providers, check out our list of the Best Life Insurance Companies.
Benefits of Guaranteed Term Life Insurance
Wondering if term life insurance is worth buying? Not sure if you need life insurance? Want to know what the benefits of term life insurance are for you?
Here are 5 key benefits of guaranteed level life insurance:
1. Replace Lost Income
If you have a family and are the primary or a significant breadwinner, ask yourself:
“How will my family cope financially if I died tomorrow and they no longer had my income to support them?”
Even though you’re out of the picture, your family will have to continue to survive financially. Bills will still arrive and food has to be put on the table.
If your income is removed from this picture, the effects on your survivors may be devastating. Even if you aren’t the primary breadwinner, but still contribute significantly to your family’s standard of living, the loss of income can be damaging in terms of your family’s financial stability and comfort.
Term life insurance may be used as a means to replace the loss of income should you die unexpectedly.
2. Pay Other Debts
Another benefit of Guaranteed Level Term Life Insurance is that it can cover your existing debts.
A term policy is generally the best life insurance of choice to cover debts. If you’re in debt, you probably need something low cost, and term is the cheapest type of policy out there. Also, most debt will be paid down or off eventually, so you won’t need permanent coverage.
Debts That Indicate You Need Life Insurance Coverage:
- Home mortgage
- RV or Trailer
- Motorcycle or ATV
- Student Loans
- Business Loan or Line of Credit
- Personal Loan or Installment Note
People also get conditional contracts or loans to buy household appliances, furniture or even to pay for the kids’ college tuition.
If you sit back and total up all your debt, you might be in for a rude awakening when you discover how much you owe. It’s probably not a problem as long as you’re working and the income is coming in, but what happens to these debts if you were to die tomorrow?
You might not have to worry about these debts anymore, but your survivors still have to pay for them. Creditors will be the first to be paid out of the estate, before your heirs receive a penny.
3. Additional Benefits For Self Employed
Many people these days are self-employed. They either work from home or operate a small business with one or several employees. So, you earn a good income, have steadily built up your business and are making a comfortable living.
Let me ask this simple question: What will the consequences be if you died tomorrow?
Do you have outstanding business loans? Do you have contractual obligations with clients, suppliers and outstanding accounts that are payable? What happens to your employees?
Then you have to ask yourself what impact will this have on your family…who’s going to pay the estate taxes…what happens to the business and all these outstanding debts and other financial obligations?
This could end up being a legal and financial nightmare for your family.
If you don’t have any form of life insurance, you are potentially exposing them to financial ruin. Term life insurance can be used in a variety of business situations that need coverage.
You can also use term insurance as a quick and simple means to guarantee a business loan. This will make