Term life insurance policies are very popular because of their low cost and relatively long term of coverage. This is life insurance in its most inexpensive form. Term life insurance provides coverage for a set period of time (the policy term) and generally pays a death benefit only if the insured dies during the policy term. Many insurance companies offer term insurance policies for periods of 10, 15, 20, and 30 years.
It is critical to comprehend the terms of any insurance policy that you are considering prior to making a purchase. Term life insurance policies have no cash value accounts, policy loan provisions or other features characteristically found in permanent life insurance policies. Term life policies generally just pay for the death benefit, which is the lump sum payment your beneficiaries will receive if you die during the term of the policy. Premium rates for renewals of these policies will normally increase at the end of the guaranteed policy period. Term insurance policies require that you furnish evidence of insurability at renewal to qualify for these rates. The better condition your body is in, the more likely you will succeed at qualifying.
Advantages:
- Premiums are generally lower than those for permanent insurance.
- You can afford higher coverage when the need for protecion is often greatest.
- It's good for covering specific needs that will disappear in time, such as mortgages or family income needs for children.
- Term insurance is an effective way to get the most coverage at the lowest cost for up to 30 years.
Term life insurance is often a good choice for people in their family-formation years and those on a tight budget. It allows an individual to buy high levels of coverage when there is great need for protection. Term life insurance is also an excellent option for covering needs that will change in time. For example, paying for a child's education may be an important goal; therefore it is sensible for the applicant to purchase a term life insurance policy that will cover the period of time necessary to reach that goal.
