A term life insurance policy is a simple way to protect the ones who matter most to you. You’ll choose how much coverage you want for a specific length of time, and you’ll be protected during that period as long as you pay your premium. With a DreamSecure Term Life Insurance policy, you’ll have peace of mind knowing your loved ones have some financial protection.
What Is Term Life Insurance Coverage?
Term life insurance is just what it sounds like: a policy that will remain in effect for a specific term or length of time. Term life insurance policies do not accumulate a cash value and pay out only if the insured dies while the policy is in effect.
American Family Life Insurance Company offers four different DreamSecure Term Life Insurance policies: 10-year, 15-year, 20-year and 30-year. These are level term policies, which means that the premiums (the amount you pay to keep your coverage in effect) and coverage amount (the amount your beneficiaries will receive upon your death) stay the same for the term you choose, unless you make changes to your policy.
How Term Life Insurance Works
If you have term life insurance coverage, you’ll pay premiums at regular intervals — for example, monthly or annual installments. Your coverage will remain in effect for the specified number of years and the death benefit will be paid in the event that the policy is active when the insured passes away.*
Death benefit proceeds may be distributed in a variety of ways. Most beneficiaries elect to receive the death benefit in a lump sum. Other settlement options, including the ability to disperse the death benefit in installments over a set period of time, also exist.
If the initial term of the policy comes to an end, the policy may be renewed. However, it is important to note that the renewal premium will be higher than premiums during the initial policy term.
As an additional benefit, the policyowner has the option to convert a term policy to a life insurance policy with long-term protection,* during a specified period, without answering additional medical questions or undergoing a new medical exam. Life insurance needs may change over time, so this conversion benefit can be a great option for evolving needs.
What Is the Difference Between Term and Whole Life Insurance?
A term life policy lasts for a specific number of years, while whole life insurance covers you for your entire life.* Though comparatively more expensive, whole life coverage means you’re guaranteed a death benefit (subject to policy terms), whereas term life insurance only delivers the payout if you die within the term of your policy.
A whole life policy can also offer a feature where you can accumulate cash value that you can borrow against in the form of a loan.** Some examples of how this could be helpful would be for things like: helping with a down payment on a house, college tuition or emergency expenses. Term life insurance coverage does not offer this benefit.
Customizing Your Term Life Policy
American Family Life Insurance Company offers additional coverages that you can add to build a life policy that suits your needs. The additional coverages available* for DreamSecure Term Life Insurance include:
Children’s Insurance Rider
Provides $15,000 worth of coverage on natural, adopted and step children of the primary insured.
Premium Waiver for Disability Benefit Rider
Waives premiums if the primary insured becomes totally disabled.
In addition to the coverages available for purchase mentioned above, each policy automatically comes with an Accelerated Death Benefit option (to be added at time of need). This benefit allows the policyowner to collect a part of the death benefit under certain conditions if the primary insured is diagnosed with a terminal illness.***
Is Term Life Insurance Worth It?
Though term life can be a great option for many stages of life, this type of life insurance is popular with younger people who are just starting their families, new homeowners with a mortgage, or those who wish to provide funds to replace income for loved ones if they were to die.
Ask yourself this: do you want to financially protect the ones you love? If your answer is yes, then term life insurance is definitely worth considering.
Find the Term Life Insurance Policy That’s Right for You
Does a DreamSecure Term Life Insurance policy sound right for you? Contact your American Family Insurance agent. They’ll help you build a customized policy that fits your unique lifestyle. You can also use our life insurance calculator to determine coverage needs and estimate costs.
*Subject to policy and rider terms and conditions, including items like plan minimums and timely payment of premiums.
**Disclaimer: Any loans taken from your life insurance policy will accrue interest. Any outstanding loan balance (loan plus interest) will be deducted from the death benefit at the time of claim. If the loan balance grows too large for the cash value to support it, the policy could terminate.
*** Exercising the Accelerated Death Benefit option may have tax consequences and could impact qualification for government benefits.
Policy Forms: ICC18-33 (10), ICC18-33 (15), ICC18-34 (20), ICC18-35 (30), L-33 (10)(ND), L-33 (15)(ND), L-34 (20)(ND), L-35 (30)(ND), L-33 (10)(SD), L-33 (15)(SD), L-34 (20)(SD), L-35 (30)(SD)
Rider Forms: ICC18-CIR (LT), L-CIR (LT), ICC18-WP (TERM), L-WP (TERM), L-WP (SD)(TERM), ICC17-ACDB TER, L-ACDB TER