Is Term Life Insurance For Me?
Article by Sabrina Tilton
If you are on a limited budget right now but understand the importance of protecting yourself and your family, term life insurance may be for you. Also known as temporary life insurance, term life can be purchased in large amounts for a relatively small initial premium. The alternative is permanent insurance, which is made for a more long-term arrangement.
Term Life insurance can be purchased in different spans of time but some of the more typical periods are 5, 10, 20, and 30 year periods. Many times, people use Term for coverage of needs such as home mortgages, outstanding debt, educational expenses or auto loans. It also provides death protection for a stated time period, or term. It can also come in handy as extra life insurance protection during the child-raising years.
Let’s review the features often offered with Term Life.
First off, the premiums are adjustable, meaning that the rate may increase or decrease however there is usually a maximum premium that is the cap.
Secondly, it can also usually be renewable so that when your policy is ending, you can reevaluate your life situation and decide if you want to renew or go another route. If it is decided that the term policy will be renewed, expect a significant change in premium as the insured’s age has increased.
Third, another option with a term policy is called conversion. It is basically turning a term policy into a permanent policy. Permanent policies boast premiums that do not fluctuate, life long time periods, profits, cash values and tax benefits for the beneficiary, depending on the company and policy of course.
And, last but not least, it’s affordable.
If you are considering a more long-term solution, term life may not be the way to go. Take a look at whole life. Whole life is built for long term financial planning and insurance goals because of the consistent premiums, longer periods of time, cash value and more. It can also be referred to as Permanent insurance. You would consider it for things such as your partner or children’s financial needs, estate planning, charity contributions and final expenses.
Every person’s situation is a bit different as is every life insurance company. So no matter what the situation, do your research! Therefore, it is highly recommended to contact several life insurance agents and discuss with them your unique situation. They will help you determine if term life is the best choice.
About the Author
Sabrina Tilton is an online marketing consultant who has written articles and blogs for numerous clients over the past 10 years out of Denver, CO. She has represented a variety of clients including insurance centennial specialists and auto insurance englewood specialists.