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Term Life Insurance FAQ

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Have questions about term life insurance?

Knowing which type of life insurance is right for you can sometimes be confusing. At Transamerica, we want to make the process as simple and easy to understand as possible. Below, please find some frequently asked questions (FAQs) about term life insurance that can help you through your buying journey.

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Q. Should I buy term life insurance?

A. Term life insurance—or any life insurance policy for that matter—is a valuable commodity, especially if you want to protect your family after you are gone. If you are looking for coverage for a specific time period, such as 10 or 20 years, term life is a good option. It’s also more affordable than other types of life insurance.

Q. How does term life insurance work?

A. Term life insurance provides an amount of money, called a death benefit, to the insured’s beneficiaries if the insured person passes away during the term of the policy. Unlike other forms of life insurance, term life insurance only provides coverage for a certain time period.

If death does not occur within the time period covered by the term life insurance, the policy can expire. However, you have the option to either renew the policy or convert it to a form of permanent insurance.

Q. What does term life insurance cover?

A. If something were to happen to you, term life insurance provides your beneficiaries with either a lump sum or a monthly payout. These payments will help your loved ones continue their lifestyle in lieu of your salary. The death benefit amount depends on your policy, which can range from $25,000 to $1,000,000.

Q. How much term life insurance do I need?

A. The amount of term life insurance that you need depends on your current situation and how much your loved ones will need should something happen to you.

Q. How much does term life insurance cost?

A. The cost of term life insurance depends on several factors, including your age, health history and marital status. Term life insurance tends to be more affordable than permanent insurance, such as whole life and universal life. In order to find out how much your plan could cost, get a term life insurance quote today.

Q. What term life insurance policy should I get?

A. The life insurance plan you purchase should be based on your individual needs. Term life insurance is a way to provide for your family in the event of your death to cover costs, such as college, a mortgage or outstanding debts. Others grant you the option to convert your term life policy into a permanent insurance policy that provides coverage for your entire life.

Find out more information on our term life policies >

Q. How long is term life insurance?

A. A term life policy from Transamerica can provide coverage for 15, 20, 25 or 30 years. The amount of years on your policy should be based on your financial needs. Term life insurance is a way to provide for your family in the event of your death to cover college costs, a mortgage or outstanding debts. A Transamerica insurance agent can help you determine the policy that best fits your particular financial situation.

Q. Can I cancel term life insurance?

A. You are free to cancel your term life insurance policy at any time. Conversely, if you do not pay your insurance payments on time, Transamerica could cancel your policy.

Q. Can I borrow against term life insurance?

A. No, you cannot borrow against a term life insurance plan because it does not carry a cash value component. However, with Transamerica’s Trendsetter® LB term life insurance option, you may be able to use portions of your death benefit to cover certain medical expenses. Keep in mind, this reduces the value of the life insurance policy because the funds used are deducted from the life insurance policy's death benefit.

Q. Is term life insurance taxable?

A. Your loved ones generally do not have to pay income taxes on the death benefit paid out to them. However, estate taxes may apply so consult with a tax professional about the tax status of your policy.

Q. Can I cash in a term life insurance policy?

A. No, you cannot cash in a term life insurance policy because there is no cash value associated with the policy. However, with a living benefit options, you may be able to use a portion of your death benefit to cover certain medical expenses. If you are looking for a policy that can accrue a cash value, learn more about Transamerica’s permanent life insurance policies, such as whole and universal life.

Q. How can I buy term life insurance?

A. Buying term life insurance is simple. Get an online quote in minutes or contact a Transamerica representative directly at 1-800-797-2643.

More questions about term life insurance?

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