What is term life insurance?
If you’ve ever asked yourself ”what does a term life insurance policy entail?”, “what’s the difference between term vs whole life insurance?” or “how much does life insurance cost?” you’re not alone. Life insurance jargon can be confusing, but fret not! Wysh is your go-to guide on all things coverage.
What is life insurance?
Life insurance is basically a contract between you and a life insurance company. You choose how much coverage you need and, if you were to die, your family (called “beneficiaries” in life insurance terms), are paid a death benefit to cover expenses.
Term life insurance covers a policyholder for a set number of years. Insurers can have strict guidelines on how long a term policy is active for (usually, 5, 10, 20, or 30 years).
Wysh offers term lengths that you can tailor according to what you need. Whether it's 10 years, 16 years, or 27 years, the choice is yours.
What’s the difference between term vs whole life insurance?
While there are different types of life insurance, customers typically shop for either whole or term policies. Whole life insurance is permanent life-long coverage that comes with a cash value you can borrow money against.
With that said, whole policies tend to have high premiums. Any money borrowed against it has to be paid back in full to avoid a decreased death benefit. Also, if the account is closed before you die, there may be tax repercussions.
We are partial to term life insurance because it’s the simplest way to get financial freedom and protection for your family.
Learn more about term vs whole
Bottom line: Term life insurance can be the best, more cost-effective option.
You only pay for the protection you need, so you don’t accrue unnecessary costs.
You decide how long you want to have an active policy.
The younger you are, the less expensive your premium may be.
What is underwriting?
Underwriting is the process in which an insurer reviews an applicant's background to determine their eligibility.
Traditionally, underwriting made applying (and getting approved) for life insurance a lengthy process. An underwriter could take days to determine an applicant's eligibility due to the amount of paperwork needed to do a background check. The applicant could be asked to get a medical exam and submit the results to the insurance company.
Technology has allowed insurers (like us here at Wysh) to quickly do digital background checks without having an applicant go to the doctor. In some cases, they may have to take a closer look at an application through a manual review, which usually takes a couple days.
How much does life insurance cost?
The cost of life insurance depends on a few factors. The underwriting team will review your:
- Age
- Sex assigned at birth
- Health status
- Background check
- General risk factors
Once that information is submitted and an application is approved, a customer can decide how much coverage they need and how long their term length will be. This will usually determine the monthly premium cost of a policy.
The younger and healthier you are, the less expensive your monthly cost can be.
Join the growing number of customers who entrust us with their financial protection
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