What is Direct Term Life Insurance?
A direct term life insurance is a type of term policy that you can buy directly from the insurance company, instead of through an agent or agency. Also known as “direct-to-consumer” (DTC), this type of life insurance policy can be more convenient and easier to buy since it can be acquired online or by phone.
How direct term policies work
Being a type of term life insurance, direct term provides the insured with coverage during a certain period of time (usually 10, 20, or 30 years) in exchange for guaranteed benefits and lower premiums. A cash payout (the death benefit) is given to your family if you die while your policy is active, so they can use it to cover short- and long-term financial needs. It is one of the most affordable, flexible, and simple types of life insurance available.
Generally speaking, term policies are already simpler to understand and sign up for without complicated contracts and conditions – but a direct term policy takes the same structure with a few added advantages and benefits.
Benefits of direct term life insurance
Faster approval
Since they can be bought online or by phone, direct term policies have a faster application & approval process. By answering a few personal questions and getting a quote right after, it is possible to apply and receive insurance on the same day with some companies and brokers (especially if a medical exam isn’t required).
Personalized
Even though the process is faster, direct term policies also provide the interested party with a personalized quote. This means that the death benefit and monthly premiums will be catered to your and your beneficiary’s needs.
Lower premiums
Being a limited-term life policy, direct term life insurance also benefits from lower premiums, since the policy will be valid for a limited period of time (like all term policies). This means that it is a good alternative for people looking for coverage for specific periods of their lives – or specific reasons such as to guarantee money for college, pay off debt, or funeral expenses.
Less commitment
Term life insurance contrasts with permanent policies by covering only the most essential years in a person’s life and by having no financial or investment features. When you’re buying property, paying for education, or still working and providing—life insurance with lower premiums can make more sense (even without dividends or cash value).