So, what is term life insurance?

So you’re considering getting life insurance? Congratulations! Life insurance is a great step towards financial resilience for your loved ones. It’s an essential safety net that protects them when you’re no longer around to help cover the mortgage or contribute to college funds.

But before you choose your policy, it’s important to understand exactly what is term life insurance.

If you’d like to learn more its benefits and how it works, we’ve put together this helpful guide.

So, what is term life insurance?

You can think of term life insurance as a subscription service for financial protection.

You pay a monthly fee (the premium) for a set period of time (the term). If you pass away during that time, a person of your choosing (the beneficiary) receives a pay-out to help support them financially once you’re gone.

If you thankfully outlive the term, your policy simply ends.

It’s often called “pure” life insurance because it does one thing and it does it well: replace your income so the people you love aren’t left in a financial lurch.

Most people use it to ensure that:

• Funeral fees are covered without dipping into savings or taking on loans
• Spouses can afford mortgage payments without being forced into a quick sale or into foreclosure
• Children’s college or university fees are covered without interruption
• Loved ones don’t inherit debt such as personal loans or credit card debt
• Families can keep the same lifestyle—from daycare and extracurriculars to the dog’s vet bills—without a sudden, drastic budget tightening.

Term life vs whole life

Term life insurance lasts for a chosen period of time, usually 10 or 20 years. Meanwhile, whole life insurance is designed to cover you for the rest of your life. It does this by combining insurance with an investment component so your policy has a cash value as well as a death benefit.

Most Americans opt for term life insurance for several reasons:

• Affordable: Term life insurance is significantly cheaper than whole life insurance
• No investment fees: The investment component of whole life insurance can come with management fees that aren’t advantageous to average earners in the US
• Flexible: You can choose to only be covered during high-need periods of your life (like when you’re paying off the mortgage or while your kids are dependent on you)

Is term life insurance right for me?

You might be thinking “I’m healthy, why bother?” In today’s economic climate, term life insurance has become a critical tool for a few specific reasons:

1. Today’s families rely on multiple incomes High cost of living and housing prices means families often need every adult working full time in order to afford everyday essentials. If your loved ones depend on your income, you need to make sure to protect them.
2. Workers aren’t tied down to one company anymore Most of us don’t stay at one company for 20+ years anymore. While many employers offer group life insurance, that coverage disappears the moment you email your two-week notice. Having your own individual policy means protection follows you, regardless of where you’re working.
3. Locking in your rates while you’re healthy Your insurance premium is based on your health. Getting your policy while you’re healthy and have no (or few) pre-existing conditions means you can lock in a lower monthly price. A 30-year-old non-smoker can often get coverage for less than the cost of a monthly Netflix subscription.

What else do I need to know about term life insurance?

Now that you know the basics of what is term life insurance, let’s go over some of the details. The insurance industry has evolved in recent years and you should be aware of the following options when shopping around for a policy:

• Terminal illness cover - Traditional life insurance pays out when you die, but many policies also cover you if you are diagnosed with a terminal illness, helping you cover medical bills and hospice care as well as enjoy your last months of life. Look for policies that list a “Living Benefit” or “Accelerated Death Benefit.”
• No medical exams - Life insurance looks at your health to determine your risk, and therefore your premium. While past policies required a medical exam, many of today’s policies allow you to bypass one to streamline the application process, pulling your medical history instead.
• Instant decisions - Technology today is making the insurance application process faster than ever. If you have a straightforward case, you can receive an instant decision online.
• Other benefits - Policies such as Eleos Life’s term coverage come with additional bundled perks you can use from day one, such as free virtual primary care and mental health counseling.

Common myths around life insurance

• “I don’t have kids, so I don’t need it.” Life insurance protects more than your kids. If you share finances with a spouse, they might need help covering living expenses on their own. Additionally, if you have debts that might be inherited by loved ones, life insurance is an essential way to protect them.
• “It’s too expensive.” Most people overestimate the cost of life insurance. A healthy 30-year-old can get a substantial policy for as little as $20-30 per month. That’s the cost of one brunch.
• “My job provides coverage.” Insurance provided through employers often provides only 1x or 2x your salary. You should talk to your loved ones to ensure that is enough and look at the cost of getting additional coverage if needed.

Is Eleos life insurance right for me?

Eleos provides fully digital, customizable term life coverage bundled with wellness perks. You’ll get access to telemedicine so you can always talk to a clinician from the comfort of your home as well as mental health counseling to take care of yourself from the inside out. All of this for free!

Design your cover and get a quote online.