How much do you really know about term life insurance? You’ve probably heard that helping protect your future with affordable term life insurance is an important step in life. But do you know when you should buy, how much coverage you might need and other details?
You can find out by taking the AIG Direct's Term Life Insurance IQ Test. Don’t worry, you won’t be graded. Plus, when you’re done, you’ll know a whole lot more about term life insurance.
Term life insurance protects the policyholder for a specified period of time.
The correct answer is true. When you buy a term life insurance policy, you get to decide how long your coverage term will last. Many people base their term length according to major events in life, such as when they plan to retire, when young children will go off to college or move out on their own, etc. Maybe you only need a term life policy for 10 years, or maybe you need 30 years. The bottom line is, you get to decide how long your term life insurance policy will last.
A good time to buy term life insurance or review your current term life policy to make sure the coverage amount is still enough is when you:
A: Have a baby
B: Get a raise at work
C: Buy a house
D: All of the above
The correct answer is D. Each of these life events should trigger a careful review of your term life insurance needs. Since term life insurance is meant to provide financial support in the event the policyholder dies, making sure that your policy provides enough coverage for your family’s current and future needs is a major consideration. Think of it this way: The term life insurance policy you bought years ago when you were single and living on macaroni and cheese in a rented apartment probably doesn’t cover you now that you’re married with two kids, a mortgage and a grown up job.
Term life insurance proceeds are paid out Federal income tax-free.
This is true, under current tax laws. Be advised that this answer is informational only and not intended to be considered tax advice. Be sure to consult with a qualified tax or legal advisory before taking any action based on this information.
You don’t need a term life insurance policy if you already have group life insurance through your employer.
The correct answer is false. Some employers offer group life insurance to workers and while it’s a nice perk of the job, it’s not usually enough to adequately protect you. Also, if you get a new job, you can’t take your employer coverage with you, so it’s a good idea to have your own individual term life policy in addition to your employer’s group plan.
Term life insurance is a “get it and forget it” type of purchase.
The correct answer is false. Buying term life insurance is a good first step, but you have to review your policy from time to time to make sure the coverage amount is still enough to adequately protect your loved ones in the event you die. If you tuck your policy away in a drawer somewhere and never review the coverage, you are putting your loved ones at risk of not having enough money to live when you are no longer there to help support them.
Start your application online now or call one of our licensed agents at 1-800-771-5144.