5 Year Term Life Insurance Policy Details

Because of it’s low premium costs the 5 year term life insurance policy is one of the easiest policies to understand. It maintains a guaranteed level premium for 5 years. With many companies, if you don’t convert this policy, you will have no more insurance after the 5 year period has passed. In other cases, however, the 5 year term life insurance premium increases at the end of the first 5 years and may increase every 5 years thereafter. This kind of life insurance policy is considered temporary life insurance. 5 year term life insurance is designed to fulfill temporary insurance needs.



Don’t pay too much for life insurance! Shop and compare Quality Quotes from Quality Carriers first. Just answer a few quick questions then get your Quotes. The process is Easy and FREE. Click Here For Free Quotes

Advantages Of 5 Year Term Insurance

  • This policy has one of the lowest premiums you can find in a life insurance policy.
  • The death benefit remains level for the duration and is guaranteed.
  • The death benefit is paid to your beneficiary free of income taxes in most cases.
  • The owner has the option of converting his or her 5 year term life insurance to a permanent life insurance policy… cash value life insurance policy …without having to qualify for it all over again.
  • Some life insurance companies offer the owners of this policy the option of renewing it every 5 years…usually at a higher premium.

Uses Of The 5 Tear Term Life Policy

  • This 5 year term life policy is usually used for temporary life insurance needs like covering an outstanding loan.
  • It may be used to guarantee funds to pay for a college education for a child in the event of your death.
  • Because of the low cost of the premiums it is used to cover family needs on a temporary basis. In this case it is usually converted to permanent insurance when the owner is able.
  • If they are short of cash business people use the 5 year term policy to fund buy-sell agreements if one of the partners or shareholders should prematurely die. Whenever the business is doing better they either convert the 5 year term insurance policy to a permanent policy or they buy a term life policy for a longer period of time…if they can qualify for the new policy.
  • 5 year term insurance is used for key employee insurance on a temporary basis.

Available Riders

These riders are available and can be added to your 5 year term life insurance policy at a minimal extra cost.

  • The waiver of premium rider takes away the burden of premium payments during disability. You must be disabled usually for a minimum of 6 months.
  • The accidental death benefit rider …or double indemnity rider allows for the payment of double the face amount of the 5 year term policy if you should die in an accident.

There are other available riders that can be added to this policy but they vary from company to company.

The 5 year term life insurance policy can be bought as a rider also. It is usually added to a permanent life insurance policy providing additional life insurance for the insured. Some companies offer 5 year term life insurance as a rider on the lives of a spouse or children.



Shop and compare Insurance Rates from 100’s of the Top Carriers. Get the Best Quotes possible. Save up to 70%. Click Here

5 Year Is Very Cheap Term Life Insurance

The 5 year term life insurance policy is almost entirely pure life insurance. It lasts for a short period of time.

The premiums of this 5 year term insurance policy as well as the death benefit remain level for the entire period of 5 years.

Should the insured die within the lifetime of the policy the full face amount is paid to the beneficiary.

At the end of the five year period there is usually no more insurance in force.

Some insurance companies, however, allow you to renew the policy for another five years at a higher premium rate and, in some cases, with new evidence of insure-ability…such as that is a medical examination.

Other life insurance companies require no evidence of insure-ability to renew the policy for an additional 5 years.

More on 5 Year Term Insurance

5 year term insurance is inexpensive life insurance. The policy accumulates no cash value nor do dividends apply.

This is a good choice if you have a need for a large amount of life insurance and have limited spendable income.

This could be a good choice for a young married couple who are aggressively saving for a house or young people who are working hard at accumulating cash to cover the costs they will incur when their upcoming baby is born.

Young singles who are maximizing their saving and investments could find this cheap life insurance extremely helpful even though their need for life insurance is limited.

They only need life insurance to cover their last expenses and, in some cases, outstanding uninsured debt.

This 5 year term insurance policy can be used by business people to cover outstanding loans or to cover a surviving partner in the case of death…while a company is in it’s infancy.

The principals of the company can also use this policy to protect the company in the event of the untimely death of a key employee. The death benefit is free of income taxes, if it is not part of an estate.

In other words if the policy is not part of a will there are no income taxes payable on the proceeds.

Your 5 year term insurance policy can be converted, entirely, or in part, to any permanent life insurance policy at any time…as long as it is in force at the time the conversion is requested.

5 Year Term Life Insurance Policy Or Rider

The 5 year term life insurance policy has been around in insurance circles for a very long time. It can be sold as a policy or as a rider to a permanent life insurance policy. It was never promoted much by life insurance agents perhaps because of it’s extremely low premium which results in a very low commission. Another consideration is that 5 years is a very short period of time for ownership of a life insurance policy. The 5 year term life insurance policy is worth a little of your attention. It is a good policy…depending on your need.



Don’t pay too much for life insurance! Shop and compare Quality Quotes from Quality Carriers first. Just answer a few quick questions then get your Quotes. The process is Easy and FREE. Click Here For Free Quotes

  • Why A 5 Year Term Life Insurance Policy?5 year term life does have it’s place in the portfolios of many life insurance buyers and can fulfill a very important need. If you have a short term need for life insurance then this type of insurance may be for you. If you find it necessary to take out a loan for a short period of time a five year term life insurance policy on your life can assure the lender that if you should die before the loan is repaid they will get back their money…Certainly that is a good reason to buy this type of insurance. You may take the loan to pay for a college education either for yourself or a child or grandchild.The face amount of the 5 year term life insurance policy remains level for the duration and so does the premium. Even though it is initially taken out for 5 years some companies allow you to continue beyond the initial 5 year period at a higher premium. The death benefit is more often than not free of income taxes. You may convert your policy to permanent insurance in the future.
  • Waiver Of Premium RiderIt may be wise to add a waiver of premium rider to your 5 year term life insurance policy. If you should become disabled…anytime after 6 months of disability…the life insurance company will take over the payment of your premiums for you, even if it is for the rest of your life. Think about it for a moment…Do you realize that people become temporarily disabled an average of about 5 times during their lifetime. If you become disabled for at least 6 months with most companies they will pay your 5 year term life insurance premium for you…even if your disability lasts for the rest of your life. Now isn’t that amazing? If and whenever you return to work you pick up the premiums from that point…you owe the life insurance nothing for the unpaid premiums.
  • Accidental Death Benefit Or Double Indemnity RiderThe famous double indemnity rider can also be attached to your 5 year term life insurance policy. If you should die in an accident the life insurance company will pay to your beneficiary twice the face amount of your policy. Let us suppose you bought a $500,000 5 year term life insurance policy with one unit of accidental death benefit for each $1,000 of your policy and you died in an accident. The life insurance company would pay $1,000,000 to your family. That would be just beautiful, wouldn’t it?


Want to protect your family with life insurance? Take a Free look at Top Quality Life Insurance Quotes from a Highly Rated Carrier and Save. Click Here For More Info

Leave a Reply

Your email address will not be published. Required fields are marked *