If you do not currently have term life insurance benefits, AWA can help. With various programs available, every member can find the coverage that works best for them. Keep reading to learn more about this type of coverage and the available options, then contact us for more information about signing up.
Guaranteed Issue Term Life Insurance Benefits
Primary members of AWA have access to guaranteed-issue term life insurance benefits. No medical information is required for approval or to sign up. Some of our offered life insurance benefits include an accelerated death benefit in which coverage applies at 50% up to $7,500 with a 12-month life expectancy.
Choose the Coverage Option That Works Best for You
We offer five coverage options:
All of the term life insurance benefits available to AWA members are underwritten by either Amalgamated Life Insurance Company or Guarantee Trust Life Insurance Company, both long-standing, A-rated carriers.
AWA Memberships with Term Life Benefits
The AWA HealthGuard membership includes valuable discounts and special offers on various consumer, business, and health care programs and services along with Accident and Sickness Limited Benefit insurance to help with out-of-pocket medical expenses. Additionally, the AWA HealthGuard Max membership includes Term Life insurance.
The AWA Life Plus ADD membership provides access to Term Life and Accidental Death & Dismemberment insurance benefits, which can help in the event of an unexpected accident.
AWA Life Plus Triad provides individuals and families with affordable access to health care with easy-to-use benefits that start right away, like Term Life, Critical Illness, and Accidental Death & Dismemberment.
AWA BasicGuard gives members access to Group Term Life Insurance benefits with Accident Only benefits during the 6 month waiting period and full benefits after the waiting period ends.
What is Term Life Insurance and How Does it Work?
In term life insurance, the insured pays a premium for a certain period of time (generally ten to thirty years). If the covered party dies during that time, the policy's beneficiary receives a cash benefit.
Generally speaking, term life insurance is more affordable than permanent whole life insurance. However, term policies do not have cash value, do not pay out anything after the policy's term expires, and are limited to a death benefit.
In addition to being more affordable, term life insurance premiums are consistent throughout the life of the policy, and the money the beneficiary receives is typically tax-free (unless the insured pays through pre-tax dollars).
What Are the Different Types of Term Life Insurance?
There are numerous types of term life insurance on the market, including the following.
Also referred to as "level term," this is the most common type of coverage. In it, a person's premium and coverage will remain the same throughout the years of coverage.
Yearly Renewable Term
As the name implies, this term life insurance protects you for one year at a time. At the end of each year, the insured has the option to renew without going through a medical exam. However, as the years go on, the price of the policy goes up.
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While the premiums are likely to be slightly lower initially, the insured will pay more over a ten, twenty, or thirty-year term than they would have if they had chosen a level premium policy.
Return of Premium
If the covered party survives throughout the term of a Return of Premium policy, some portion of the premium will be returned. In some cases, the entire premium will be returned.
There is one big catch to this coverage type: premiums can be up to four times as much as they would be with flat term coverage. Even one missed payment can result in coverage being canceled, and no premiums received.
These are the types of policies offered by AWA. They are simple to obtain because they do not require a medical exam. In most cases, the covered party needs only answer a few simple health questions to apply and be approved for coverage.
What Are the Pros and Cons of Term Life Insurance?
Term life insurance can be an excellent option for individuals who do not want to leave their loved ones to pay off any debt or funeral expenses. However, as is true of any insurance product, there are both pros and cons to this type of coverage.
The Pros of Term Life Insurance
- Lower payments. In most cases, it is more affordable to purchase term life insurance compared to the cost of purchasing permanent life insurance. Generally speaking, the younger a person is when they start coverage, the more affordable that coverage will be.
- When you choose term life insurance, you get to choose how long you would like your coverage to last. If you only need it for ten years, you can purchase a policy for ten years. If you want it for 30 years, then that is an option too. This makes it each to predict how much you will pay in premiums for the entire term of your insurance.
- The potential to convert to permanent insurance. It's often the case that a person who wants to extend their term life policy can do so by converting it to permanent life insurance coverage.
The Cons of Term Life Insurance
- There's no cash value. With permanent life insurance, there is a cash value that the insured could potentially borrow against if needed. There is no such cash value with a term life policy.
- There could be no payout. One of the reasons that the premiums are so low on term life policies is that if the covered party survives beyond the length of the policy, the insurer often does not have to pay out any benefits.
When Should I Get a Term Life Insurance Policy?
That depends on your financial situation and your financial goals. For example, parents of young children often get a term life insurance policy to last twenty years, and they choose a level of coverage that would allow their child(ren) to get through high school and college.
Some companies do not approve everyone for term life insurance, and they require a medical exam and will exclude higher-risk people. In that case, it can be much easier to get approved as a younger person, and that might be the best time to apply. Remember that AWA has guaranteed approval options that do not require medical exams.
Do Term Life Insurance Premiums Increase Over Time?
It is possible that term life insurance premiums will increase for a person over time, depending on their health and age. However, it all depends on the policy. Many companies offer term life at a guaranteed rate, meaning that the premium will not change for the entirety of the term.
Keep in mind that a policy with premiums that are guaranteed not to go up is generally more expensive than one that can fluctuate.