Life Insurance: 100-Year Term Policy Benefits And Drawbacks

Term to 100 life insurance, also known as T100 or Term 100, is a type of permanent life insurance that lasts for the insured person's lifetime. Unlike other term life insurance products, such as the 10-year or 20-year term, Term to 100 life insurance doesn't need to be renewed at the end of the term and it also doesn't expire. Once approved for this plan, the premiums remain the same throughout the policy term. When the insured person reaches the age of 100, the premiums stop but the coverage continues.

How does 100-year term life insurance work?

Term to 100 life insurance, also known as T100 or Term 100, is a type of permanent life insurance that lasts for the entirety of the insured person's life. It is similar to whole life insurance in that it offers lifelong coverage, but it does not accumulate cash value like whole life insurance policies. Instead, the insured person pays level premiums at a fixed rate until they turn 100 years old, after which the coverage continues for the rest of their life without any further premium payments.

The main advantage of Term 100 life insurance is that it provides permanent coverage at a lower cost compared to other permanent life insurance options. The premiums are guaranteed to remain the same throughout the policy term, providing clear-cut coverage with steady premium rates. This makes it a good option for those seeking lifelong dependents and wishing to leave a legacy for their loved ones.

Most insurance companies offer Term 100 life insurance to individuals between the ages of 18 and 75, with some providers offering coverage up to 85 years of age. The cost of the policy depends on various factors, including age, sex, coverage amount, and type of coverage. Additionally, some providers offer riders or add-ons that provide additional payouts for accidental death, dismemberment, critical illness, or other events.

It is important to note that Term 100 life insurance does not have a cash-out option or dividend payments. The policy only pays out upon the death of the insured person. If the policy is cancelled or multiple payments are missed, the insured person will not receive any payout, and all premiums paid will be forfeited.

How much does it cost?

The cost of 100-year level term life insurance, also known as Term 100 or T100 insurance, depends on several factors, including age, sex, coverage amount, and type of coverage. While the specific cost will vary depending on the provider and their pricing guides, there are some general considerations that can help you estimate the cost.

Firstly, Term 100 insurance is generally cheaper than whole or universal life insurance but more expensive than a typical term life insurance policy. This is because Term 100 insurance provides permanent coverage until the age of 100, whereas typical term life insurance policies usually cover a fixed period, such as 10, 20, or 30 years. The permanent nature of Term 100 insurance means that you will pay level premiums until you turn 100 years old, after which the coverage continues without any further premium payments.

When determining the cost of Term 100 insurance, your age is a significant factor. The younger you are when you purchase the policy, the lower the cost is likely to be. Most insurance companies offer Term 100 insurance to individuals between the ages of 18 and 75, with the option to apply for coverage amounts ranging from $25,000 to millions of dollars. Your sex also plays a role in determining the cost, with men typically paying higher premiums than women due to shorter life expectancies and riskier jobs or lifestyles.

Your health status is another critical factor in calculating the cost of Term 100 insurance. Insurers consider your height, weight, and medical history, and certain medical conditions may result in higher premiums. Additionally, tobacco use can significantly impact your rate, with smokers often paying substantially higher premiums than non-smokers.

Other factors that can influence the cost of Term 100 insurance include your occupation, hobbies, criminal history, and financial history. Riskier jobs or activities may result in higher premiums, and issues in your credit report or long periods of unemployment may also affect your rate.

To get a personalized estimate of the cost of Term 100 insurance, it is recommended to use online quoting tools provided by insurance companies or consult with licensed advisors who can guide you in choosing the right coverage and provide accurate quotes based on your specific circumstances.

What are the pros and cons?

100-year term life insurance, also known as Term 100 or T100, is a type of permanent life insurance policy. It lasts for the entirety of the insured person's life, with level premiums paid until they turn 100 years old. While there is no cash value or dividends option, it is less expensive than whole or universal life insurance.

Pros:

• It offers permanent coverage, lasting for the entirety of the insured person's life.
• Premiums are level and do not increase over time.
• It is less expensive than whole or universal life insurance.
• If you live to 100, you no longer need to pay premiums but still retain coverage.
• It is a good option for estate planning.

Cons:

• There is no cash value or dividends option.
• It is more expensive than term life insurance.
• If you miss multiple payments or cancel the policy, you will not get a payout, and all premiums paid will be forfeited.

Who offers it?

100-year level term life insurance, also known as Term 100 or T100 insurance, is offered by many Canadian companies, including PolicyAdvisor, BMO Insurance, Desjardins, RBC Insurance, and TD Insurance. PolicyAdvisor's website states that they partner with major insurance providers, so it is likely that they work with additional companies beyond those listed.

TD Insurance's T100 insurance is available to Canadians aged 18 to 70 1/2 years old, with coverage options ranging from a minimum of $25,000 to a maximum of $10,000,000. TD Insurance also offers a guaranteed acceptance life insurance plan for Canadian residents aged 50 to 75 who do not want to undergo a health questionnaire. This plan offers coverage of up to $25,000 and does not require a medical exam.

Should I get it?

100-year level term life insurance, also known as Term 100 or T100 insurance, is a type of permanent insurance policy. The coverage lasts for the entirety of the insured person's life, and level premiums are paid until they turn 100 years old.

There are several factors to consider when deciding whether to purchase a 100-year term life insurance policy. Here are some key points to help you make an informed decision:

Benefits of 100-Year Term Life Insurance:

• Permanent Coverage: This type of policy provides permanent coverage, meaning it lasts for the entirety of the insured person's life. You won't need to worry about renewing the policy or having it expire.
• Fixed Premiums: The premiums remain the same throughout the policy term, providing predictability and stability in your financial planning.
• Lifetime Protection: Even after reaching the age of 100, the coverage continues, ensuring lifelong protection for yourself and your loved ones.
• Cost-Effectiveness: 100-year term life insurance is generally cheaper than whole or universal life insurance options, making it a more affordable choice for permanent coverage.
• Ideal for Estate Planning: With guaranteed premiums and no need for renewals, this type of policy can be well-suited for estate planning and ensuring a financial legacy for your loved ones.

Drawbacks of 100-Year Term Life Insurance:

• No Cash Value: Unlike some other permanent insurance options, 100-year term life insurance policies do not accumulate cash value. There is no cash-out option, and you won't receive any dividends or returns on your premiums.
• Forfeiture Risk: If you miss multiple payments or cancel the policy, you won't receive any payout, and all the premiums you've paid will be forfeited. This can be a significant loss, especially if you've been paying premiums for a long time.
• Difficulty in Advanced Age: Obtaining replacement coverage in advanced age may be more challenging and expensive if your policy is cancelled or lapses in your later years.
• Limited Flexibility: 100-year term life insurance may not offer the same level of flexibility as other types of policies, such as the ability to withdraw funds or access the cash value during your lifetime.

When deciding whether to purchase 100-year term life insurance, it's essential to carefully consider your financial goals, risk tolerance, and the specific needs of yourself and your dependents. It's always a good idea to consult with a financial advisor or insurance expert to weigh the pros and cons based on your unique circumstances.

Frequently asked questions