Buy Term Life Insurance For Temporary Needs
- Author Donald Lusan
- Published December 3, 2010
- Word count 507
You may want to consider term life insurance whether your need is short term or long term. You should appreciate though that term insurance is temporary insurance. What do I mean by that?
Why Do You Need Term Insurance?
If you need to protect your family for a given period of time then term insurance may be what you are looking for. Your youngest is age 6, for example, and you want to be certain s/he graduates college even if you are not here. A 20 year term policy would likely do the trick.
If you have your last child in college you probably would be fine with a 5 year term policy.
Term insurance frees up cash you normally would need to save to guarantee your family's future. If you have huge demands on your income you don't need to be spending a lot on life insurance. As term policies cost less than permanent policies you would be wise to buy term life insurance. In many a case you have the option to convert to a permanent plan within a specific period of time.
Another reason you would buy term, other than the fact that it replaces your income in the event of your death, is to replace the financial value of a stay at home spouse. It is very difficult to put a value on such a persons contribution but you will agree that this person has tremendous value.
Banks may also require life insurance coverage before they give you a loan. As this is a temporary need a term policy would fit the bill.
How Does Term Life Insurance Work?
You contract with a life insurance company to pay a set premium and upon your death the company will pay the face amount of the policy to your beneficiaries either in one lump sum or in the form of an income. The death benefit is usually tax free unless you make the proceeds part of your estate through a will.
Your premiums can be paid monthly, quarterly, semi-annually or annually.
What Types Of Term Life Policies Are Available?
There are basically two types of term policies. The first is the yearly renewable term policy and the other type is level term life insurance.
Yearly renewable term can be looked at as a one year term which you have the option of renewing each year at a higher premium. The death benefit remains level throughout. This type of policy starts out to be very inexpensive but the premiums can eventually become quite prohibitive.
The other plans also have level face amounts but the premiums remain level throughout the life of the policy. The premiums are higher than the yearly renewable term from the beginning but they never increase.
You can buy your policy for 5 years, 10 years, 15 years, 20 years, 25 years or 30 years. The longer the period you contract for the more it costs. A 30 year term policy will cost more than a 15 or 20 year term. A 5 year policy will have a lower premium than a 10 year level policy.
Additional information on term life insurance
For more than 40 years Donald has been known for his extensive knowledge of the life insurance business. He has represented some of the largest and most admired life insurance companies in the United States as well as Canada. His advice is invaluable.
Donald's website is: Life Insurance Hub
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- Exploring Denver on a Dime: A Frugal Travel Guide
- Top 10 Ways Production Scheduling in Business Central Transforms Manufacturing
- Strength Training and it's Incredible Benefits for Fat Burning
- Enhancing Home Security with Aluminum Shutters: A Focus on Weatherwell Elite
- 5 Easy Ways to Make Oral Hygiene Fun for the Whole Family
- Transforming Plastic Extrusion Machines into Recycling Powerhouses
- Unraveling the Potential of Plastic Extrusion Machines
- The Rise of Plastic Recycling Machines: A Step Towards Sustainability
- Strawberry Cheesecake Ice Cream: OMG! Unreal!
- The Advantages of Using Professional Home Cleaners in Ilford
- 8 Compelling Reasons to Hire Professional Home Cleaners
- The 12 Steps Narcotics Anonymous Program To Recovery
- Send Money to Tanzania: Effortless Transfers with SafariRemit
- Stylish Savings: 10 Frugal Ways to Stay Fashionable in 2024
- Fly Cheap With FlightPapa To Any City
- How Collaborating with a Software Development Company Can Propel Your Business Forward
- A Comprehensive Guide to Choosing the Best Hair Transplant Method
- 15 Frugal Tips for a Memorable Wedding Day
- Credit Union vs. Bank
- Explore the Advantages of Renewable Energy: Wind, Solar, Biomass, Hydropower and Geothermal Energy
- Frugal Nutrition: How to Eat Healthy on a Budget
- Fintechzoom Richard Mille
- Who owns the most Bitcoin?
- Fintechzoom IBM Stock: Powerful!
- Building a Professional Website on a Budget: Using Free Tools like WordPress and AI
- Navigating Vietnam's Tourist Immigration: Challenges and Solutions
- Bitcoin FintechZoom
- Cost-Effective Gardening: Tips for Enhancing Your Garden on a Budget
- Steve Wozniak: WOZ
- Keeping Your Garage Door Running Smoothly: A Guide to Drum Replacement with GarageDoorMagnolia