Learn about Term Life Insurance, the protection and disability coverage it includes, and its benefits and advantages over other Life Insurance.
Term Life Insurance is the most popular of all life insurance, as it has the advantage of being the cheapest Life Insurance.
This insurance pays the insured sum if the person dies during the term of the policy.
The temporary insurance has a duration of one, five, ten, fifteen or twenty-five years; They can also be hired at “reached age”, that is, they will be in force until a certain age is reached, for example sixty-five years.
According to the Mapfre Foundation, in a term life insurance “the insurer covers the risk of death for a certain period of time”, you can consult this definition here .
Regarding Life Insurance, why should you hire a Temporary?
Temporary insurance is the one that offers the greatest protection at the best price, it is the cheapest of life insurance.
It is also very good to cover the most risky periods in life, for example when starting a family.
It is important to contract an insured sum that is sufficient for our beneficiaries to live at least five years with the insurance product, and there the Temporary allows to reach that goal more easily.
What are the disadvantages of a Temporal?
It has the disadvantage that its coverage ends, unlike other life insurance, such as Ordinary Life, which continues throughout the life of the insured; And when coverage ends, the person may no longer be insurable, and no longer have the ability to purchase any other life insurance.
Term life insurance is cheaper, because it protects less.
To understand the problem with this, we must give an example: let’s say that a person buys a temporary policy of 25 years when they turn 30 years of age; And let’s think that this person does not die but that at age 50 he acquires a disease that makes him uninsurable, for example cancer.
When their insurance ends, after 25 years of paying premiums, this person cannot purchase other insurance as it is no longer insurable. You could be very upset about paying for life insurance for 25 years, and end up without a chance for protection for your later years.
Most of the Temporary policies expire without neither the insured nor the beneficiaries receiving any benefit; some sources say that less than 1% of Temporary policies pay any benefits.
What does Term Life Insurance include?
The Term Life Insurance always includes a basic coverage for death, which pays the insured sum to the beneficiaries in the event of the insured’s death.
It also commonly includes disability coverage that protects the insured in the event of total and permanent disability.
Let’s look at three examples of term life insurance, from some of the main insurers in the country:
Temporary, AXA’s Temporary Insurance
AXA Vida ProTGT Temporary is a Temporary life insurance available in terms of 1, 5, 10, 15, 20 and 25 years; and reached the age of 60, 65 and 70 years. In other words, it is covered for the number of years contracted, or until the contracted age is reached.
Includes the following coverages:
Decease . Pays the beneficiaries the insured sum contracted; This is the basic coverage of AXA Vida ProTGT Temporal.
Exemption from payment of premiums for total and permanent disability . If the insured person suffers a total and permanent disability, he / she is exempt from paying premiums for the basic death coverage.
Additional payment for total and permanent disability . In the case of total and permanent disability, the insured sum contracted will be paid; the sum insured for this coverage may be different from that of the basic Death coverage.
Spousal coverage . If the insured’s spouse dies, their beneficiaries will receive the insured sum contracted.
Accidental death and organic losses and collective death . Pays the insured sum if the death occurs due to an accident or collective death; If there is an organic loss, a percentage of the insured sum will be paid.
Additional compensation for cancer . Pay an additional amount in case of cancer.
Additional payment for serious illnesses . Pay a million pesos if any of the following diseases are diagnosed: myocardial infarction, stroke, cancer or kidney failure.
Continuous unemployment protection . Exempts the payment of the insurance premium, up to one year, in the event of involuntary unemployment of the insured.
Funeral expenses , The beneficiaries receive a payment of $ 80,000 pesos in the event of the death of the insured.
How much does AXA Seguros ProtTGT life insurance cost?
For a 37-year-old man, non-smoker, with an insured sum of $ 5,000,000 pesos and a term of 15 years, AXA’s ProTGT Life Insurance costs $ 14,163 pesos per year; if all the aforementioned coverages are added, the cost rises to $ 44,930 pesos per year.
Privileges of the Term Life Insurance
Privilege is a Term Life Insurance from GNP Seguros that covers terms of 10, 20 and 30 years, or at the age of 65.
Includes the following coverages:
Decease . This is the basic coverage of this insurance and pays the insured sum to the beneficiaries in the event of the death of the insured.
BIT – exemption from payment of premiums for disability . Exempts the insured from continuing to pay premiums in the event of total and permanent disability.
ISE – Disability without waiting . It covers the payment of the insured amount due to disability without a waiting period.
IMA – compensation for accidental death l. In the event of accidental death, the insured sum contracted in the basic coverage will be pay.
DIBA – Double compensation for accidental death or loss of limbs . In the event of accidental death, the insured sum contracted will be paid; If the death occurs in a collective accident, double will be paid; includes organic losses.
How much does GNP Privilege insurance cost?
For a 37-year-old man(life insurance for smokers), non-smoker, with an insured sum of $ 5,000,000 pesos and a term of 10 years, the GNP Privilege Life insurance costs $ 15,300 pesos per year; If all the aforemention coverages are add except IMA (which cannot be contracted together with DIBA), the cost is $ 31,450 pesos per year.
Term Life insurance from Metlife
This insurance can be contract for terms of 1, 5 or 10 years; You can also choose if the payments and the insured amount are in pesos or in dollars; It can be pay annually, semi-annually, quarterly or monthly.
Includes the following coverages:
Basic Death Coverage . Pays the sum insured in the event of the death of the insured.
Exemption from payment of premiums for disability . This coverage is always include and exempt from the payment of premiums to the insured in the case of disability.
Advance payment of the sum insured for disability . In the event of total and permanent disability, the contracted sum will be pay.
Compensation for accidental death . The insured sum will be pay if the death is due to an accident; There is a single, double or triple payment option.
Serious Diseases . The insurer sum will be pay if a serious illness is detect; the sum insured is up to three million pesos.
Funeral Expenses . The amount of $ 100,000 pesos will be deliver to the beneficiaries in order to support funeral expenses if the insured dies.
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How much does Metlife TempoLife insurance cost?
We quote a 37-year-old man, non-smoker, with an insured sum of $ 5,000,000 and a term of 10 years, and Metlife’s TempoLife Life Insurance costs $ 12,967 pesos per year. By adding all the previous coverages (with double compensation for accidental death, which excludes single and triple compensation), the cost rises to $ 37,517 pesos per year.