Five-Year Term Life Insurance

5-Year Term insurance provides life insurance protection where the initial premiums are guaranteed and remain level for the first five years.

Generally an affordable form of life insurance, term coverage provides pure insurance protection only. It does not accumulate cash value, nor is it eligible for dividends.

5-Year Term can be appropriate when coverage is needed for a well-defined period of time. If the insured were to die, insurance proceeds could be used to help pay a mortgage, fund a child’s education or ensure business continuation by helping to cover business expenses.

What Can 5–Year Term Life Insurance Do for You?
5-Year Term Life Insurance provides pure insurance protection that can be suitable in a number of situations. For example:

• Short-term need for protection: 5-Year Term is often used to protect needs that last for a well-defined period, such as a student loan or mortgage. For business owners, it can be used to cover outstanding loans, shielding partners from financial hardship.
• Large insurance need, limited budget: Because it is an affordable form of life insurance protection, 5-Year Term can be the solution when protection is essential, but dollars are scarce. People in their 20s and 30s often purchase a 5-Year Term policy and later convert it to a permanent plan. The conversion privilege guarantees their insurability at a later date — even if they become uninsurable.

Five-Year Term Life Insurance Quick Hits:

• Pure life insurance protection
• A death benefit that is, in most instances, free from federal income tax
• A conversion privilege that allows the policyowner to convert all of part of the policy into permanent, cash value life insurance
• Starting in year six, premiums on the renewed policy will typically be higher, because they are based on the Insured’s age at the start of the renewal period
• Guaranteed renewable through the expiration age

• There is a need for temporary protection. When coverage is needed for a relatively short period of time, Five-Year Term Life Insurance can be ideal
• Dollars are Limited. If life insurance is essential, but funds are scarce, Five-Year Term Life Insurance can serve as a stop gap.
• Supplemental Coverage is Needed- Five-Year Term Life Insurance can be added as a rider to a permanent plan to boost the death benefit economically
• Other Coverage is Required — Riders can be added to insure a spouse and/or children or a business partner.
• Business Owners Need Protection- Five-Year Term Life Insurance can be used as a hedge to cover outstanding loans.