Term insurance as the name implies covers you for a specified period of time and only pays a death benefit if you die during that specified term.The terms years can range from five to 30 years, with 20 years being the most popular. It is important to remember that these types of policies do not contained cash values, that is only reserved for universal life insurance or whole Life insurance.
The biggest advantage to term life insurance is the cost. Many families and individuals only need to cover certain major expenses, for example a mortgage, in this case one would buy either a 15 year term life insurance policy or a 30 year policy. Another example would be to cover major expenses while the children are still young. This is where term insurance makes sense. There is no disputing that you get the most insurance with the least amount of dollars with term Insurance.
Term insurance is often the best choice for people in their family formation years, especially when their budgets are tight, because it allows you buy large amounts of insurance when the need for protection is at the greatest level.
This type of insurance is also an excellent option for covering needs that will disappear over time. For example, if paying for a university education is a major concern but you were fairly certain that you won’t need Insurance after the children graduate, then it may make sense to buy policy that will get you through the college years.
The question that often arises with term insurance is, what happens at the end of the term? Life insurance policies will allow you to renew at the end of the term but the bad news is that the rates will be substantially higher. Also many companies will make you provide evidence of insurabilty, in other words they want you to take another medical exam. Consumers must be very careful when shopping for term life insurance. Many companies offer policies that are guaranteed convertible. A guarantee convertible policy will let you convert the policy into a whole life policy without evidence of insurability. What that means in plain English is that you will have to prove that you’re in good health.
To get a good understanding of term life insurance, consider this analogy. Term insurance is like leasing a car when the term expires you usually walk away without equity in the vehicle. Life insurance consumers must be very careful when shopping for a policy. They should ask the following questions: how long will I need the policy for? ,Are the premium is guaranteed for the length of the term?, Is it guaranteed to be renewable? and is it guaranteed to be convertible?
Life Insurance does not have to be expensive as long as we are aware of all the different options that are available to us, we can make informed intelligent decisions regarding our life insurance needs. For example if you visit Mozdex.com they have a state-of-the-art quote engine that will quote every major company in United States and will give you a side-by-side comparison of all the different options and prices.
Lauren Cohen is an author for Mozdex.com