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Term life insurance is the most simple and affordable life insurance option. It provides coverage for a set period of time or “term” (typically 10–30 years), and is designed to protect your dependents during that term. If you pass away during the term period, your beneficiaries receive a cash payment referred to as the “death benefit” to cover expenses or income loss related to your passing.
Term life insurance with Ethos might be right for you if:
- You need to replace your income over a specified period of time (like raising children or paying off a mortgage)
- You need to cover short-term financial responsibilities such as a loan or credit card debt
- You need additional coverage temporarily, such as during child-raising years or starting a business
- You want the most affordable coverage
- You want a more streamlined and straightforward process
The main differentiating factor of whole life insurance is that it lasts for your entire life and can be used as an investment vehicle—unlike term policies, which expire after your chosen length and have no investment component. Some insurers invest your whole life premium payments and the interest earned on those investments goes back into your policy as accrued cash value. For these reasons, whole life insurance policies typically cost 5-15x more than term policies for the same amount of coverage.
Whole life insurance is a good option for those with complex financial situations, or someone seeking the security of coverage for the remainder of their life. Term life is a good fit for those who want the most affordable coverage or who need to replace their income over a certain period, for example until their children are no longer dependent or the mortgage is paid off.
As a licensed producer and third-party administrator, Ethos works with some of the industry’s top life insurance carriers and reinsurers to sell simple, affordable policies, including Legal & General America, Ameritas Life Insurance Corp., AAA Life, and TruStage®. Ethos has streamlined the application process with predictive modeling and proprietary technology to make it easier for customers, and we leave the actual insuring to the industry giants that have paid out billions of dollars in claims.
Simplified issue:
Most of our term policies are simplified issue, which means the application process is simplified. The underwriting decision is instant, and based solely on third-party data pulls and the applicant’s responses to some health questions within the application. No medical exams necessary.
This type of underwriting may be right for you, particularly if:
- You need life insurance, but you aren’t sure you’d qualify for a traditionally underwritten policy
- You want a simple process without medical exams or lab tests
- You thought you couldn’t get life insurance because of your age or health
Fully underwritten:
Some of our term policies are fully underwritten. Traditionally, most fully underwritten policies require applicants to fill out a full application and have a medical exam. However, we don’t require a medical exam from most applicants (just a few health questions are asked within the application).
This type of underwriting may be right for you, particularly if:
- You’re in good health
- You’re looking for life insurance with a higher death benefit
- You don’t mind a longer application process
It’s ultimately up to your beneficiaries to decide how to use the payout. People often use it to help cover things like:
- Home mortgages or rent
- Lost income
- Loans & debt
- Children’s education
- Living expenses
- Funeral costs
In general, it’s simple for your beneficiaries to file a claim and receive the payout. If you pass away while your coverage is in force, your beneficiary can file a claim with your insurance carrier, and the carrier will work with them to issue the death benefit payout. Your insurance carrier will be identified on your policy documents. Assuming there are no unusual complications, your beneficiary will receive an untaxed, lump-sum payment for the value of the policy (the death benefit). For example, if you purchase $1 million in coverage, your beneficiary will receive a tax-free $1 million lump-sum payout.
A claim may not be paid out if underwriting finds that parts of the application were answered untruthfully or if the claim is the result of death by suicide within the first two years of the policy being in force.
If you do not pass away during your term, you have a few options when your term ends:
- You can apply to extend your term to ensure you always have coverage.
- You can apply for a new policy with a longer or shorter term, with the same, or more, or less coverage.
- You can elect to not get another policy if you determine you no longer need the financial protection.
Search for answers on our full FAQ page.
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