05/27/2026
Term insurance is a temporary insurance that is fixed for a term ranging from 10 - 35 years.
When it comes to insurance, people focus only on Death benefit but what they overlook is the living benefits (where many end up with a GoFundMe page as the person is still alive but policy is not covering the major incidents). In other words, it's called Accelerated Death Benefit. Premiums are Level for the term as lock in that premium for that term.
1. Death Benefit - Lump Sum amount paid to beneficiary if the insured passes away
2. Critical Illness - Living benefit that covers critical incidents like Major Heart attack, Coma, Paralysis, Severe burn, blood cancers and so on
3. Chronic Illness - Unable to perform, without assistance from another person, at least two Activities of Daily Living (Bathing, Dressing, Toileting, Transferring, Continence, Eating). Other words this could be called short term / long term disability
4. Terminal Illness - Expected to result in the insured’s death within 24 months from the date of diagnosis like end stage cancer or any other life-threatening illness
People claim that many companies cover these benefits like Costco provided or Policy genius but look for the payout min and max and also the life expectancy coverage for the terminal illness. The devil is in the details and so please pay attention to those.
Employer provided insurance covers basic life insurance / death benefits (1x, 2x, 5x...) and they are annually renewable term. If you switch employers, they might or might not provide life insurance options and since it's a group insurance, premiums depend on the employer. If you are out of job even for a day and if any unfortunate event happens that day, then you are left without insurance. They don't cover the Living benefits as discussed above. LTD and AD&D options you chose are to cover some portion of the salary and not the medical expenses.
Common questions asked.
1. How much insurance do I need to take? - Depends on your DIME but industry standard recommends to take 10x to 15x of your gross income per year
2. How long should I take it for - It's very subjective. I see people recommending 20-35 years but it's specific to your family needs. This product is not one size that fits everyone and so it has to be customized.
3. What if I leave the US? - There are companies that cover all these benefits if you move out of the US and you should choose such one. If you feel the Death benefit is more and can't afford it, then reduce the coverage amount when you move out of the US and thus reduce the premiums in the affordable range.
Do you know that you can use Term policy to design as a Mortgage protection with just $3 - $5 per month. We buy a house with a dream to spend our life in that house but remember the bank owns the property and not us, until it's fully paid off. In case of any uncertain events in the family, we still want our loved ones to stay in that house and don't want to lose that asset.
Be certain during uncertain times and not the other way. Hope this post is informative.
Let me know if I can be of any help!
