Term life insurance available through AIG Direct covers the policyholder for a specific amount of time, which is known as the term. The term lengths vary according to what the individual chooses. Terms typically range from 10 to 30 years and increase in 5-year increments.Among the most popular life insurance products available, term life tends to be more affordable. It typically provides an amount of coverage for much less than permanent types of life insurance.
Depending on the type of policy, term life insurance available through AIG Direct can offer fixed premiums for the entire term. The death benefits can be fixed as well. Because it's affordable and the payments can stay the same, term life insurance available through AIG Direct is popular with young people just starting out, families and people who want protection for a specific period of time. (For example, someone who wants to protect an income until retirement or while paying off a home mortgage.)
Term life insurance available through AIG Direct doesn't accrue cash value like several other types of life insurance, but with most term policies, beneficiaries do receive the full face amount. For example, if a policy's face amount is $100,000, the beneficiary receives the full amount, pure and simple. Even better, the benefits paid by term life insurance available through AIG Direct are tax free, according to current tax laws.
There are several types of term life insurance available through AIG Direct, including level, renewable, convertible and return of premium (ROP).
One of the most popular types of term life, level term life insurance available through AIG Direct has a fixed premium payment for the duration of the term. It also has a fixed benefit amount. The terms range from 10 to 30 years. A longer term could mean a higher monthly premium, because the carrier typically averages the cost of insuring someone who is younger with the cost of insuring someone who is older (when premiums are more expensive). Because level term life has a "set it and forget it" fixed payment, it can be easier for people to budget. Having a fixed benefit that pays the face amount also holds appeal as straightforward, "pure" insurance.
A renewable term life policy available through AIG Direct typically runs for a shorter term, but has the option to renew it. The terms often run from 5 to 30 years. With each renewal, the premium is based on the person's current age, which can result in a higher premium. Sometimes, the renewal requires proof of insurability, so the person must continually demonstrate good health in order to renew. There are renewable policies that do not require proof of insurability, but the renewal rate will still be based on the current age. People tend not to purchase renewable term life for long periods such as 30 years, because the rising cost of the premium can make it impractical.
Flexible and affordable, convertible term life insurance available through AIG Direct can be "a valuable benefit" for some. This type of insurance allows people to convert their term life insurance into a permanent life policy, without a medical exam or the need to prove insurability. The premiums can be lower than a standard term life policy, so it often appeals to young people and families on a budget. As time goes on, policyholders may need more coverage, or they might decide a policy with a cash value makes more sense. Having the ability to convert the policy offers nice flexibility as needs or financial goals change. There are two things to be mindful of with a convertible policy. First, when you convert to a permanent life insurance policy, the premium increases. Second, there is typically a window during which you can convert. The ability to convert does not run for the entire term, so it's wise to watch for the deadline.
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