Term Life Insurance in Florida

Like all life insurance plans in Florida, term life insurance seeks to secure the financial future of individuals listed as beneficiaries in the policy document if the insured dies within the policy's active period. It is an insurance plan that ensures human life and pays benefits to the beneficiaries of the policy if the insured dies within the policy active period.

In Florida, term life insurance is for a specified period, usually in terms between 5 and 30 years, where the premium is fixed for the term of the policy. Term life renewable or nonrenewable after the term is over. Annual renewable term automatically renews every year as long as premium is paid each year, up to age 100.

The policy makes a payout only if the insured dies within the policy’s term. If the insured does not die before the end of the policy’s term, they will have to renew the plan. Otherwise, it will expire at the end of the term. The premium for term life insurance will increase at renewal because the cost depends on age. Individuals pay higher for life insurance during renewal than when they initially purchased the plan. In Florida, policyholders can enjoy part of the death benefits of term life insurance if they purchase a living benefit rider along with the plan. The living benefit rider allows the policyholder to get a monthly payout or a lump sum out of the plan’s benefit if certified chronically or terminally ill within the active policy period. The living benefit is a percentage of the total benefit and may have a maximum yearly payout and maximum lifetime payout limit. Due to the living benefit rider, the insured's death benefit will be lowered if it has been utilized.

What is Considered Term Life Insurance in Florida?

In Florida, term life insurance is a short term life insurance plan that ensures that the insured’s beneficiaries are paid a specific death benefit if the insured dies within the policy’s term as specified in the policy document. Typically, the policy runs for a specific term length, usually between 5 years and 30 years (possibly renewable until age 100), and like most life insurance products, the full benefits of the plan come when the insured dies within the policy’s term. However, in Florida, the insured can access part of the benefits while alive by activating the living benefit rider. The living benefit rider allows the insured to receive a lump sum or monthly payments if certified permanently ill by a licensed healthcare professional. The living benefit can also be accessed if the insured is permanently impaired by adding disability rider to term life policy.

Term life insurance offers the insured the opportunity to renew the policy at the end of the term or convert it to permanent life insurance towards the end of the policy term. Renewal of the plan will cost more than the original plan due to the increased age of the insured. Also, converting to permanent life insurance will raise the premium, since the conversion will build cash value. Convertibility of term life insurance enables the insured to switch the plan to permanent life. However, an insured should consult with a Florida-licensed life insurance agent before converting their term life insurance plan.

What is the Point of Term Life Insurance?

Term life insurance is a non-permanent policy that provides financial protection for beneficiaries of the plan if the insured dies within the plan’s active period. Term life insurance is a means for beneficiaries of the policy to:

• Pay children tuition at the demise of the insured, who may be the sole sponsor of their education

• Complete or initiate projects which were on the bucket list of the insured before death

• Maintain the same or higher living standards if the insured dies

• Pay debts or loans the insured may have left behind

• Take care of funeral expenses resulting from the insured’s death

• Take care of everyday expenses

With term life insurance, both the insured and the beneficiaries will have peace of mind that the insurance plan will cover some financial responsibilities in the event of the insured’s sudden death.

What is Term Life Insurance For?

Term life insurance acts as security for payment of future expenses that may come to the insured’s beneficiaries as a result of the insured's death. The death benefit of term life insurance is used to settle bills like:

• Child’s education

• Debts and loans

• Financing future projects

• Daily living expenses for the beneficiaries

• Funeral costs of the insured

• Mortgage

What are the Types of Term Insurance?

The types of term life insurance in Florida are:

• Guaranteed level term life - With guaranteed level term life insurance, the policyholder pays level premiums throughout the plan's duration, and the death benefit paid out does not change.

• Decreasing term life - The benefit of this type of term life insurance reduces as the policy winds down. The insured pays the same amount as premiums but at fewer times towards the end of the policy’s term. The policyholder chooses the percentage of decrease in benefit when buying the policy. The percentage of decrease determines the payout size if the insured dies within the policy’s active period. A high percentage decrease leads to a low payout and vice versa. For instance, in a $2,000,000 decreasing term life insurance with a 3% yearly reduction, the payout reduces by $60,000 yearly (0.03 x $2,000,000).

• Return of premium term life - This type of term life insurance pays back premiums to the insured if they outlive their plan. If the insured dies within the policy’s active period, their beneficiaries will get the plan’s death benefit. However, the insured must pay the premium without default for the whole period of the policy. Return of premium term life insurance costs up to 4-5 times the amount paid for standard term life insurance. Insurance companies make a profit by investing the extra money. Generally, it may be less expensive to buy a normal standard term life insurance policy. It may be more rewarding to buy a standard term life policy.

Before you buy a return of premium life insurance, speak with a financial advisor, also, you should contact a Florida-licensed life insurance agent.

• Annual renewable term life (ART) - This is a yearly renewable term life insurance plan, which can be renewed until age 100. The premium for this plan increases at each renewal due to the insured getting older.

• Convertible term life - The policyholder of a convertible term life insurance policy has the option of converting it to a permanent life insurance. With convertible term life insurance, the insured does not need to undergo a fresh medical examination to show proof of insurability. Converting from term life insurance to permanent life insurance leads to an increase in premium, the premium increases are due to more benefits that come with the new plan.

• Modified term life - Modified term life insurance is a term life plan whose premiums sometimes change over time, between intervals of 5 and 10 years. For instance, a $180 annual premium may rise to a $240 yearly premium after 5 years.

Do you Need Term Life Insurance?

Getting term life insurance is not compulsory in Florida, but it is relatively good to have one if you have dependents. Accidental death can happen at any time, and with term life insurance accidental death benefit rider, you have more coverage and beneficiaries will receive a higher payout if the insured dies within the policy’s term. Term life insurance guarantees the insured’s beneficiaries the payment of a death benefit, which can help pay a home mortgage, children's education, debts, and other needs the beneficiaries may want to meet.

Before you buy term life insurance, you should have dependents or certain needs you want to fulfill with it. You should also consider how the policy fits into your present and future plans. You need to take into account your:

• Financial status and debts - Do you need term life insurance to pay off loans and debts? You may not want to leave debts behind for your loved ones in the event of death.

• Policy duration - How long do you want the policy to run? Due to its time-dependent nature, term life insurance may be a good way to secure the people you care for from financial struggles within a specific period.

• Cost of premium - Does the plan's cost fit into your finance? Though term life insurance is one of the most affordable life insurance policies, the premium increases with its renewals. Will you consider renewal if you outlive the plan?

• Future goals - You may have projects you want to carry out in the future but are afraid you may not be around to see them through; term life insurance may finance them even when you are no more.

• Type of term life insurance - What do you want to happen if you outlive the term life insurance plan? Do you need your premium refunded, or would you like to convert it to a permanent life policy?

A Florida-licensed life insurance agent can guide you to make good choices, regardless of whatever goal you want to achieve with term life insurance. Contact a Florida-licensed life insurance agent to evaluate your need for term life insurance and help you make a more informed decision.

Why Do you Need Term Life Insurance?

You may need term life insurance in Florida for these reasons:

• To help your dependents or loved ones pay off debts

• To help finance future projects whose success depends on finance from you and will be left undone if you are no longer around to bear the costs

• To provide financial security for your dependents

• To cover end-of-life expenses like burial or cremation

• As a short term policy to provide coverage for debts and loans

Term life insurance is less expensive than other life insurance plans. It can be used to pay outstanding or future debts owed by the policyholders or their dependents if the insured dies within the policy’s stipulated period. The insured can also use it to fund future projects like children's tuition or to sustain the family’s living standard while they are gone. For married couples, it is a good way to provide financial security for the family if one of the spouses will struggle financially at the death of the other.

How Much Term Life Insurance Do you Need?

The amount of term life insurance you need in Florida depends on what you need the plan for or the type of problem you need to solve. For instance, your term life insurance may be for debt repayment, your child’s education, mortgage repayment, or even funeral expenses after death. In each scenario, you may have to estimate the costs you will incur to estimate the amount of term life insurance you should buy.

To estimate the amount of term life insurance you need, do the following:

1. Determine your obligations - What are your current responsibilities, and how much does it cost to meet them? You may need to calculate your family upkeep (if married), mortgage, children’s tuition, hospital bills, and other expenses that you are responsible for.

2. Evaluate your family’s lifestyle - You may want your family to maintain their current or a higher living standard when you are gone. To do this, you may require a certain minimum income level. The amount of death benefit you get depends on your premium; if your premium is low, your death benefit will be low, and vice versa. Hence, you may opt for a higher premium to meet a certain benefit target. To arrive at a reasonable estimate, calculate your annual income (including social security) and multiply it by the number of years you want the policy to run to arrive at a reasonable estimate. Add your savings, investments, values of other life insurance you may have, and your retirement savings to the figure you get. If you have difficulty in estimating how much your family may need, seek the help of professional financial advisors to help you figure it out.

3. Know how much your spouse earns - In most cases, for married couples, once one member dies, the responsibilities of two persons become that of one individual. If you are no longer around to offer financial support, your spouse may have to bear the burden of taking care of the family needs. To arrive at how much term insurance you need, you may have to calculate your spouse’s annual salary (add any other source of income) and compare it against the family spending.

4. Estimate your coverage needs - To get an idea of the amount of term life insurance you need, add up the estimate from the steps above and consider how long you want the plan to run. You may pay off some or all of your debts before the plan expires, in which case, you may not need much coverage if the debt is your main determining factor.

Contact a Florida-licensed life insurance agent to advise you on the amount of term life insurance coverage you should get based on your needs.

What Term Life Insurance Coverage Do you Need?

The type of term life insurance you need depends on what you want to cover. There are several types of term life insurance plans in Florida that can serve different purposes, depending on what you aim to achieve. Your term life insurance can pay off debts and cover expenses when you are no more. However, what happens during or after the plan’s expiration (if you outlive the plan) may also matter. You may want a plan that has specific attributes, for instance:

• Guaranteed level term life insurance assures you level premium throughout the policy. You pay the same amount as the premium till your policy runs out. Guaranteed level term life insurance is suitable for individuals who want term life insurance:

  • with a premium that will remain the same throughout the policy’s period

  • that will provide lifelong coverage, but do not know what to buy a life policy because of its cost. A guaranteed term life policy cannot be outlived; as long as the insured pays the premium when due, coverage continues

  • that is flexible and can be designed to meet the required needs

  • that allow them to increase or decrease the size of their premiums

  • whose coverage is similar to whole life insurance plans. However, a guaranteed term life insurance policy does not build cash values like whole life insurance plans, though it is a more affordable way of getting life insurance coverage.

  • that has guaranteed death benefits at the demise of the insured

• Return of premium (ROP) term life insurance makes premium refunds if you outlive your term life insurance plan. A large percentage of term life insurance policyholders outlive their plans and, in most cases, do not get back the premium they paid. However, if you are looking for a term life insurance plan with the added advantage of getting your premium back if you outlive the plan, then the ROP term life policy is the right choice. A return-of-premium clause entitles the policyholder to a premium refund if the plan expires before their death. Also, with ROP term life insurance:

  • you can convert your policy to a permanent life policy

  • your returned premiums are tax-free (you do not pay tax on them)

Return of premium term life insurance costs more than the standard term life insurance. Make sure to weigh the gains against the cost before buying one.

NOTE: Usually, insurance companies have a 5 year waiting period to cancel the policy and to get the return of the premium. On requesting the return of premium, your policy is canceled and it no longer provides coverage.

• Decreasing term life insurance reduces your benefits and the frequency of your premium payments as the policy term winds down. Decreasing term life insurance is suitable for individuals looking for coverage for financial obligations. For instance, if you are looking to pay back loans, as the loan amount decreases with time, there is a corresponding reduction in the cost of the decreasing term life policy.

• Convertible term life insurance allows you to convert your term life insurance to whole life or permanent life insurance. A convertible term life insurance plan is ideal for individuals who seek permanent policies but, at that moment, cannot afford its high premiums. It is a policy that may meet your needs if you want:

  • flexibility

  • to build cash value in the future

  • a simple underwriting process without the stress of further medical examination

  • Lifetime coverage but initially can not afford a whole life insurance plan

A convertible term life insurance attracts additional cost when converting to a whole life policy due to premium increase. You will pay more for the whole life insurance plan because of the extra benefits that come with it.

• Living benefits riders allow you have access to some of your benefits while still alive. This is a good option for individuals with a family history of cancer, Alzheimer's, and other terminal illnesses.

The different types of term life insurance may come with different pros and cons. Seek the advice of a knowledgeable Florida-licensed life insurance agent before purchasing one.

Is Term Life Insurance Required by Law in Florida?

No, Florida law does not require an individual to have a term life insurance plan. Having term plan insurance is a choice, but it may help take care of expenses you may leave behind after you are gone.

How Does Term Life Insurance Work?

In Florida, term life insurance works by paying benefits to the policy's beneficiaries at the insured’s death. The insurance company is liable to pay benefits to the policy’s beneficiaries only if the insured dies within the policy’s active period. For the beneficiaries to get death benefit payouts, the insured must not be owing premiums on the plan at the time of death. Term life insurance is a good plan for individuals who have families or dependents. The benefits of this plan can be used to cover mortgages, debts, children's education, and many other expenses that may be difficult for the beneficiaries to finance in the absence of the policyholder. The insured can choose the policy's beneficiaries, the length of the policy’s term, and the coverage amount. Discuss with a Florida-licensed life insurance agent in your locality for details on how term life insurance can benefit you.

What Does Term Life Insurance Cover?

In Florida, the death benefit of term life insurance covers various expenses, including:

• Mortgage

• Funeral costs

• College tuition

• Debt and loan repayments

• Healthcare expenses

• Daily living expenses

• Lost income due to death of the insured

What is Term Life Insurance Good for?

Term life insurance is good for providing financial help to the policy’s beneficiaries in the event of the insured party’s death. In Florida, term life insurance pays off debts and offers financial backing for specific unfinished projects. Speak with a Florida-licensed life insurance agent for more insight on the usefulness of term life insurance based on your specific needs.

What Does a Typical Term Life Insurance Include?

Term life insurance includes coverage for death by natural means or accident. If the insured dies due to an illness, injuries sustained during an automobile accident, or other unintentional accidents, the insured’s beneficiaries will receive the policy’s death benefit payout. Term life insurance also covers death by a natural disaster such as earthquakes, floods, or hurricanes.

Contact a knowledgeable Florida-licensed life insurance agent to learn about specific term life insurance policies and what they include before buying.

Who is Covered by Term Life Insurance?

Term life insurance covers the insured, while the death benefit goes to the policy's beneficiaries, which could include the insured’s children, spouse, or dependent relatives. The beneficiaries can only get the death benefit if the insured dies within the active policy period.

Business Use of Term Life

As a business owner, group term life insurance is a good option when looking to provide life insurance coverage for employees. Group term life insurance insures your employees’ lives and pays benefits to their beneficiaries if they die within the policy term. You can also buy a group term life insurance carve-out plan. Under a group term life insurance carve-out plan, you can remove highly compensated individuals from the group plan and place them on an individual life policy which comes with a split-dollar arrangement.

The split-dollar arrangement allows you and the insured to share the cost and benefits of the policy. If the insured dies while the policy is active, the death benefit is split between you and the beneficiaries. If you have business partners insured under the group term life insurance carve-out plan, you can use your share of their death benefits to buy out their shares in the company.

What is Not Covered by Term Life Insurance?

Term life insurance disburses benefits to beneficiaries listed by the insured in the policy document. However, it does not cover the insured's death if they die due to suicide (within the first 2 years of coverage). Likewise, term life insurance does not cover death caused by the insured participating in dangerous activities, self-inflicted wounds, or through a crash of a private jet due to its high crash rate.

What Does Term Life Insurance Typically Exclude?

Though term life insurance pays life benefits of insureds who die while the policy is active, it excludes benefit payouts for death under certain conditions, this includes:

• Death of policyholders while taking part in criminal actions - Term life insurance typically excludes coverage for individuals whose deaths result from their active participation in crimes.

• Death as a result of the policyholder being under the influence - If an insured dies in an accident resulting from alcohol or drug abuse, the insurance company may not pay a death benefit.

• Death by an act of war - Term life insurance does not pay death benefits if the insured dies during a war.

• Death by suicide - Beneficiaries will not get a payout if the insured commits suicide within two years of purchasing the policy in Florida.

• Murder - Term life insurance in Florida does not cover the insured being killed by their beneficiaries so they can inherit the insured’s death benefits (732.802: Slayer Rule).

Coverage exclusions may depend on the insurer. Insureds are encouraged to read their policy documents to understand their term life insurance coverage inclusions and exclusions. Because of the complexity of insurance policy documents, it is advisable to contact a Florida-licensed life insurance agent when reviewing your policy document to get an accurate explanation.

What is an Example of Term Life Insurance?

Generally, in Florida, irrespective of the type of term life insurance, beneficiaries get payouts as benefits if the insured dies within the policy's active period. For instance, if Jack bought a $2,000,000 guaranteed level term insurance policy and dies within the policy’s active period, his beneficiaries will receive the full $2,000,000 payout. However, payment is possible only if he does not owe any premiums and the nature of his death is covered under his plan.

If Jack buys a 30-year $2,000,000 decreasing term life insurance policy with an annual reduction rate of 3% and dies at the end of the tenth year, his beneficiaries will not get the full benefit of $2,000,000. The payout for the policy will reduce by $60,000 each year (0.03 x $2,000,000) and after ten years, the benefit will amount to $1,400,000 ($2,000,000 - ($60,000 x10)).

Regardless of the type of term life insurance purchased, if Jack exceeds the plan’s term and wants to renew at the expiration, his premium will increase. Also, if he outlives the policy, there will be no benefit, and he loses all the premium he has paid unless his plan has a return of premium option.

What is the Most Common Use of Term Life Insurance?

The common use of term life insurance in Florida is to replace the insured's income when they die. It is also used to cover medical bills, debts, and end-of-life expenses, such as the burial expenses of the deceased.

What is the Difference Between Term Life Insurance and Whole Life Insurance?

In Florida, term life and whole life insurance have unique benefits, though both are life insurance plans that pay death benefits at the insured's death. Term life insurance provides coverage for a specific number of years, usually between 5, 10, 20, or 30 years, and pays a death benefit if the insured dies within the policy’s active period. Though this plan is very affordable, it does not guarantee benefits, and if the insured outlives the policy there will be no death benefit. Term life insurance is not a permanent policy, it terminates at the end of the period stated in the policy document. Term life insurance does not have cash saving options, and if the insured outlives the plan, all the paid-in premium is in effect lost.

In contrast to term life insurance that runs for a fixed period, whole life insurance, along with all the other Cash Value life insurance policies provide life-long (permanent) coverage. All cash value life insurance, including Whole life insurance, guarantees death benefits if the insured dies, and it also includes savings through its cash value component. Cash value allows policyholders of permanent life insurance plans to save part of their premiums. They can access the saved premiums by making a partial withdrawal from their cash-savings. A whole life policy may not provide more coverage than a term life plan, but it definitely offers lifelong coverage.

Whole life insurance is more expensive than term life insurance. Whichever type of life insurance you may desire, seek a professional opinion from a Florida-licensed life insurance agent before you buy it.

What is Better Term Life Insurance or Whole Life Insurance?

It depends on what you hope to achieve, and each has its advantages and disadvantages. Term life insurance offers coverage for a certain duration and is good for individuals who want affordable life insurance that will only provide coverage for a limited period. Once the policy’s term expires, the coverage ends, and the premium paid for coverage is lost unless the policy comes with a return of premium option. Also, term life insurance does not make an allowance for the policy's savings.

Unlike term life insurance, whole life insurance offers coverage throughout the life of the insured. Although it is a bit more expensive, it comes with the added benefit of a cash value component. The cash value component of whole life insurance serves as a living benefit for the insured, which can be used to pay premiums, or supplement retirement income. With whole life insurance, beneficiaries are guaranteed death benefits as long as the insured pays their premiums when due and meets the criteria in the policy document.

NOTE: Whole life insurance is just one of the various other life insurance policies that allow you to build cash value tax-deferred and use it tax-free. Consult with a Florida-licensed life insurance agent to help you decide on what life insurance plan is appropriate for your needs.

Do I Need Term Life Insurance - FAQ:

If you are looking for a flexible and temporary life insurance plan to provide coverage for a certain duration and also allow you to reevaluate your needs once the plan expires, you may need term life insurance. Term life insurance can provide coverage for mortgage debt, children's tuition, and secure your family's day-to-day expenses in case of the insured’s sudden demise.

Do I Need Term Life Insurance if I Have Medicare?

Yes, you may need term life insurance if you have Medicare. If you have a Medicare plan in Florida, you may need to get term life insurance, especially if you have dependents. Medicare is a health insurance plan that provides healthcare coverage for senior citizens of 65 years and above and people with end-stage renal disease (ESRD) or certain disabilities. Medicare only insures against injuries and illnesses and does not pay death benefits at the insured's demise. Older adults or people with life-ending diseases are more likely to die earlier than younger and healthier individuals. Getting a term life insurance policy in Florida will ensure dependents have money for funeral expenses and other costs that may be incurred at the demise of the insured. However, if you are more concerned about funeral expenses, you should get final expense insurance (FE).

Do I Need Term Life Insurance if I Have Medicaid?

Yes, you need term life insurance if you have Medicaid. In Florida, the Medicaid plan only provides healthcare benefits in the event of illness or injury. It does not pay a death benefit when the insured dies. You can combine your Medicaid plan with a term life insurance plan if you have dependents (especially if you have a family). Term life insurance makes payouts that beneficiaries can use to settle funeral expenses and take care of other needs if the insured dies within the plan’s coverage period.

Do I Need Term Life Insurance if I Have No Dependents?

No. You may not need term life insurance if you do not have dependents. For residents of Florida who do not have dependents, term life insurance may not be necessary. However, you may need a term life insurance plan if you do not want to burden the state with funeral expenses at the time of death. Also, term life insurance may help you fund any charity organization you have or may want to contribute to. Alternatively, if you do not have any pressing needs that need to be taken care of after your demise, final expense (FE) insurance may be a cheaper option for funeral expenses.

Do I Need Term Life Insurance if I Have Cancer?

No, you do not need term life insurance if you have cancer. Though you may get term life insurance while having certain pre-existing health conditions, purchasing term life insurance while undergoing cancer treatment is a bit complicated. Getting term life insurance if you have cancer will depend on the grade and stage of cancer. Insurance companies that may offer coverage to cancer patients will require cancer to be in remission. Typically, they may look at your health history for the past ten years and may use the National Cancer Institute’s “Surveillance, Epidemiology, and End Results” (SEER) database before underwriting your policy.

Insurance companies may not sell you life insurance policies if you have terminal illness. However, your term life insurance plan provides you coverage if you develop cancer within your plan’s coverage period. Contact a Florida-licensed life insurance agent to get more details on term life insurance coverage for cancer and other available options.

Do you Lose Money with Term Life Insurance?

Yes, but the amount you lose depends on the type of term life insurance plan you have. With the traditional standard term life insurance, once the policy term ends, you no longer have coverage. Like all term insurance policies, term life insurance is a short term policy whose coverage ends after a specified period. If you outlive your insurance, you will forfeit the premium you paid unless you renew the policy or you are on a convertible term life plan; in either case, your premium payment and coverage will continue.

Also, if you buy a standard term life insurance with return-of-premium as a policy rider, you will get back your premium. However, the main disadvantage of this type of term life insurance is that it comes at a higher cost; hence, it may be advisable to get the traditional standard term life insurance and save or invest the extra money.

Do I Need Term Life Insurance if I am Single?

You may not need term life insurance if you are single and have no dependents. However, if you have dependents like your younger siblings who depend on you, or you are planning to raise a family soon, you may need term life insurance. The cost of term life insurance rises with age; the older you are, the more you have to pay for coverage, and it is better to buy one at a young age. Contact a Florida-licensed life insurance agent to get the rate for individuals of your age.

Does Term Life Insurance Increase with Age?

Yes, term life insurance premiums increase with age. In Florida, term life insurance, like all life insurance plans, is age-dependent; older individuals pay higher costs for coverage. This is because insurers believe that younger individuals are more likely to outlive their policies than older adults. For instance, Bob, a 25-year-old male, pays $88 monthly for a 20-year term life insurance policy with a $2,000,000 death benefit, while Jack, who is 40 years old, may pay $134 for the same plan. Also, the cost of your term life insurance policy increases when the policy expires and you want to make a renewal. In this case, you will pay a higher cost because you are now older.

Do I Need Term Life Insurance at 55?

Although you may be eligible for term life insurance at 55, most insurers may be unwilling to provide it because of the high possibility of death within the coverage period. Also, at age 55, it may not be a good option to purchase term life insurance, especially if you no longer have dependents, because the plan may be quite expensive. If you are 55 and worried about funeral costs, purchasing a final expense (FE) insurance policy may be better.

Do I Need Term Life Insurance after 60?

If you are above 60, have no dependents, no debts (including mortgage), and are financially capable of meeting your daily needs (through retirement benefits and investments), you do not need term life insurance. However, you may need term life insurance in Florida if you have dependents or outstanding payments that you do not want to leave behind for others when you are no longer around. At age 60, unlike younger individuals below 55 years who are eligible for a 30-year term life insurance plan, you are limited to a 20-year or a 10-year plan that usually comes with a high premium.

Is it Better to Buy Term or Whole Life Insurance?

The best life insurance plan for you depends on what you need the plan for. If you need life insurance that will only run for a limited period and is affordable and flexible, then you should go for term life insurance. At the end of the term, the policy will offer you the option of renewal or conversion to permanent life insurance. However, term life insurance comes with caveats:

• It does not guarantee benefit unless you die within the coverage period

• You may forfeit your premium if you outlive the policy

• It does not have cash savings

• It is not a permanent insurance and coverage ends after a certain period

Whole life, just like all Cash Value insurance does not have a time limit and provides coverage until the policyholder dies. Whole life insurance is more expensive than term life insurance but offers additional benefits that term life insurance does not offer. Whole life insurance guarantees your death benefit as you cannot outlive your policy, and you have cash-savings that you can use to meet other needs while alive. With whole life insurance, beneficiaries are guaranteed death benefits if the insured dies. If you need the additional benefits not offered by term life insurance, you may need to consider whole life or other cash value life insurance policies like universal life insurance or variable life insurance. Speak to a knowledgeable life insurance agent licensed in Florida for more details.

When Does Term Life Insurance Coverage Begin?

Typically, term life insurance does not have a waiting period; coverage begins after you complete the paperwork and make a premium payment. However, note that this does not apply to every life insurance company. In some cases, the insured may have a waiting period of one month or even more, depending on the insurer, and coverage cannot begin until after this waiting period. Hence, it is essential to review your policy document and confirm your policy’s waiting period with your insurer or the Florida-licensed insurance agent through which you purchased the policy.

Who Can Get Term Life Insurance in Florida?

In Florida, anyone can get term life insurance as long as they qualify for coverage. Different types of plans may have different underwriting requirements:

Who Qualifies for Term Life Insurance?

Buying term life insurance may not be for everyone. Insurance companies consider your health history before selling you term life insurance; they ask health questions to determine if you have previous health issues that may recur, and may require a medical exam for illness that may turn terminal. If you have serious health issues, you may be too high of a risk for the insurer and may not be eligible for term life insurance.

Term life insurance has criteria that must be fulfilled for beneficiaries to get death benefit payouts. For instance, the insured must die within the policy’s active period, and such death must be covered under the policy. If you are above 50 years, it may be difficult to get term life insurance because insurance companies usually consider older persons high risk to insure. If you are above 50 years, you may need to weigh your options to see if there are better alternatives to term life insurance. For instance, if you have no dependents and are only worried about funeral expenses, it may be cheaper to get final expense (FE) insurance.

Consult with a Florida-licensed life insurance agent to determine whether you qualify to get a term life insurance policy in Florida.

Who Needs Term Life Insurance?

Generally, you need term life insurance if:

• You need life insurance coverage for a short period of time, in order to cover a debt repayment of a financial obligation or

• You need the cheapest life insurance coverage with the maximum death benefit.

Individuals who have dependents, debts, or need to make certain future plans for when they are no more need term life insurance. Term life insurance can serve as security if a debtor is insured and dies before settling the debts. Individuals who want to raise families or have dependents they want to take care of after their demise need term life insurance. The death benefit from term life insurance helps take care of funeral expenses, pay off debts or loans, and take care of the responsibilities that used to be handled by the deceased before their death. However, term life insurance is for a limited period and does not guarantee a death benefit and cash value component.

Discuss your life insurance needs with a Florida-licensed life insurance agent who can help you assess your needs and provide advice on whether term life insurance is your best option.

Who Should Get Term Life Insurance?

You should get term life insurance if:

• You seek pure life insurance coverage, to provide funding to pay for a predetermined expense in case if you die during the term of coverage,

• Your do not want to accumulate tax-deferred cash value to use life insurance for its living benefits, or

• You are following the advice of a Florida-licensed life insurance agent who has analyzed your life insurance needs and proposed Term life insurance as the most optimal solution.

Discuss with a Florida-licensed life insurance agent for more explanation on why term life insurance may be a solution to your needs.

What are the Benefits of Term Life Insurance in Florida?

Term life insurance is cost-effective and flexible, and it protects beneficiaries from the financial burden that may arise due to the insured's demise. In Florida, the policy’s death benefits can help pay for the insured’s children's education, mortgage, loan repayments, debts, or daily expenses that used to be the deceased’s responsibilities. Term life insurance is renewable and convertible to permanent life insurance. Also, term life insurance comes in different types, which are tailored to meet different needs.

Different types of term life insurance policies serve different purposes. Contact a Florida-licensed life insurance agent for complete details about how each one can benefit you.

PROs and CONs of Term Life Insurance in Florida

PROs of Term Life Insurance

The advantages of term life insurance in Florida include:

• Affordability Term life insurance is among the cheapest types of life insurance policies; the low cost of the plan is because it only provides coverage for a limited period.

• Flexibility - It offers the options for renewal and conversion to a permanent life insurance plan, term life insurance conversion period is towards the end of the policy term. Also, the insured can choose premium payment term options that are suitable for them. An insured has the option of choosing regular pay or limited pay. With regular pay, the policyholder pays the same premium as the policy term, while limited pay comes with less premium than the policy term.

• Simplicity - It is easy to understand the policy compared to other life insurance policies.

• Tax-free death benefit - Term life insurance death benefits are not subject to taxation; the beneficiaries do not need to pay tax on the payouts they receive from the insurance providers. Beneficiaries can spend the death benefits as they deem fit.

• No penalty for policy cancellation - The insured can terminate the policy at any time without incurring extra charges.

CONs of Term Life Insurance

Though term life insurance in Florida has merits, it also has demerits, which include:

• No return on investments - Unlike permanent coverage life insurance plans that have cash values, term life insurance is for protection against financial burdens. It does not have an allowance for savings. The premiums an insured pays for term life insurance are only meant to pay the policy’s agreed death benefits to the insured’s beneficiaries at the insured’s demise.

• Age restrictive - The cost of term life insurance increases with the insured's age. A 40-year-old will pay a higher premium than a 30-year-old for a term life insurance plan of the same duration and similar death benefits. Also, at 65 years or older, you are restricted to a 20 or 15-year term life insurance plan.

• The death benefit is not guaranteed - Term life insurance provides coverage for a set period, unlike permanent life plans, it does not offer guaranteed death benefit. If the insured dies outside the coverage period, the beneficiaries are not eligible to receive the death benefit. Also, if the insured outlives the plan, the premium paid will be forfeited unless the plan comes with a “return-of-premium rider.” Term life insurance with a “return-of-premium rider”' is more expensive than the standard term life insurance. Hence, due to the high cost of return of premium term life insurance, the insured may gain more by buying the standard plan and investing the extra money.

• No surrender value or loan facility - Term life insurance does not have a surrender value. If an insured voluntarily cancels the policy before the expiration date, the premium paid will be forfeited. Also, due to lack of cash surrender value, term life insurance policyholders are not entitled to policy loans.

• No cash benefit - Unlike permanent life insurance plans, term life insurance does not have cash value. It does not make allowance for cash benefits because there is no cash saving option.

• It does not guarantee long term coverage - Term life insurance may only provide coverage for a short period, it does not provide life-long protection like permanent life plans. Unlike permanent life insurance plans that do not have termination date, term life insurance provides short term coverage that can last for just 5 years.

• Time-restricted - Your term life insurance coverage is limited, your coverage only lasts for the set period, for example, if your policy is to run for 10 years, you will not receive coverage beyond 10 years.

Is Term Life Insurance Worth Buying in Florida?

For most people in Florida, term life insurance is worth buying. If you have people depending on you to fulfill their financial obligations, or you have debts or loans to repay. In that case, term life insurance is worth buying to ensure that you do not leave financial burdens behind for others when you are no more. It also helps to complete unfinished projects that may stall due to the death of the insured. For personalized information on what you can achieve with term life insurance, seek the opinion of a knowledgeable Florida-licensed life insurance agent, who will outline its uses and advise you on the policy that will suit your needs.

What Happens if you Don’t Have Term Life Insurance?

If you do not have term life insurance or any other life insurance, your dependents will not get death benefit at your demise, and they will have to settle your funeral expenses out-of-pocket. Also, if you have outstanding debts or loans, your loved ones will have to look for means of settling them without a death benefit payout. Someone else may have to step up and take charge of your family expenses (if you have any), or your family may be left to bear unplanned financial burdens.

Why is Term Life Insurance Important?

Term life insurance is important because it provides financial security to your dependents if you die within the policy coverage period. The payout from term life insurance may go a long way in settling outstanding debts, paying funeral costs, and serving as income for the beneficiaries. Also, it can help pay for children’s education and maintain certain living standards for members of the family. Due to its low cost, term life insurance may be suitable for low-income earners looking for a way to secure the future of their dependents.

What Happens When your Term Life Insurance Lapses?

If your term life insurance lapses, you will no longer have coverage under the plan, and your term life insurance may lapse if you do not pay your premium when due. If you miss your premium payment, your term life insurance will not automatically lapse. Instead, your insurer will send a mail to notify you that your premium is due for payment. Your insurer will also give a grace period of 30 days for you to make payment after notifying you. If payment is not made within the grace period, your policy will lapse.

To reinstate your coverage, you will have to pay for the overdue premiums, and most times, in addition to a reinstatement fee. To avoid coverage lapse, you must pay your premium when due, else, your term life policy may not run its entire term. To get more information on how to avoid coverage lapses, contact a Florida-licensed life insurance agent.