Life Insurance

Some Term life insurance policies are only insurance contracts. They do not have a cash value or added savings feature. However, during the life of the policy, you may be able to secure loans using death benefit as collateral. Any such use of your term life insurance policy will, however, diminish the death benefit until the loan plus interest is repaid.

Term life insurance policies are popular among consumers because of their affordability and flexibility. With a term life insurance policy you can purchase a face amount of insurance for a specified period of time. Most policies will be level term policies of 10, 20, or 30 years.

Insurers typically offer term policies in increments of 5 years, up to a maximum of 30 years. Some insurers also offer annually renewable one-year policies.

Term life insurance policies usually feature a fully guaranteed rate that will not change over the life of the policy, which is a level term policy. Some policies may feature variable rates in return for lower premiums.

Insurers almost always require a paramedic exam for any type of life insurance. Some insurers will allow a policyholder to renew an expiring policy without benefit of a new exam, but this is not always the case. Most insurers will not extend a new term life insurance policy to applicants who are 70 or older.


Is term life insurance right for you?

Term life insurance is designed to offer basic coverage for a specific number of years at a fairly low cost. This makes it an especially attractive option for people who need to protect their beneficiaries, but who don't have a lot of cash freed up for the project. The idea of most financial planners would tell you to buy term life insurance and invest the difference from what you would have paid for a permanent or whole life insurance policy.

Any life insurance policy that covers you for a specific, predetermined amount of time is a term policy. Should you die during your policy's term, your beneficiaries will receive the payment or lump some of policy benefit paid for. If you were to outlive your term life insurance policy and should the policy expire before you do you do not receive the death benefit. When choosing your policy's term and benefit, you need to carefully consider your current financial and family situations. Most insurers will offer helpful tools to help you calculate your ideal policy size. Make sure to contact your insurance broker so he can do needs analysis for you.

Who isn't a good match for a term policy? A life insurance policy can be used for any number of goals, from backing a business loan to enabling a charitable gift. If your goal is anything other than temporarily protecting loved ones against the financial hardship that would result from your death, you might want to look into a permanent policy.

But the most important thing to know . . .

Is that comparing multiple term life insurance plans will almost always save you money? Annual premiums on the same coverage can vary up to 50% from carrier to carrier. And tweaking your coverage numbers just a little can affect cost too. For a slight increase in premiums, you could see a lot more in protection. any people are worried about the financial effect their death will have on their spouses and children. They fear that those that depend on them for their housing, food and education may not have enough after they are gone. Their dependents will have to cover the costs of their funerals also.

How will your dependents have enough income to survive after you are gone? If you have had these fears, you may have considered buying life insurance. Life insurance guarantees that certain people of your choice (your beneficiaries) will receive money if you die.

It's easy to put off learning about life insurance but you're taking the first step. Death is an uncomfortable subject that no one wants to consider. Yet it's important to face your financial needs and plan for a solution now which will be the best option for you and your family.

Because the subject makes people uncomfortable, it's easy for insurance agents to take advantage of this and charge the highest fees. People may consult only one agent and rely on his or her suggestions. Uninformed insurance buyers can end up paying far more money than they really need to because they are afraid to comparison shop for low cost life insurance.

Another important focus for life insurance is how much coverage you will need. How much income will your survivors need? If you provide your family's whole income, you will need enough coverage for your dependents to live on until they can be self-supporting.

You should consider how long it will be until your spouse can find employment. If you are a parent, think about your children. Will they need to be supported until they are finished with college?

College Education For Your Children

And how much will college cost? If your children are very young, you will need to factor in more years of support than if they are teenagers. You may need to factor in child care if the surviving parent is working.

Another life insurance focus is to think about potential funeral expenses. No one likes to consider that reality, but funerals are costing an average of $10,000 now. Once you have fully assessed your financial needs, a life insurance company can help you focus on a life insurance quote, and decide which policy is best for you.

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