Term life insurance is a budget-friendly policy option that allows you to be covered at a low cost. Although a term life-insurance policy is cheaper than other options, it gets the job done by taking care of your beneficiaries financially in the event that you pass away. This option is ideal if you in good health and at a young age.
When you decide to purchase a term life insurance policy, you pick the length of the ‘term’ you would like to be covered for. The term options include choices such as one, five or 10 years of coverage and you are set to pay the premium throughout the specified length of the term you choose. If you pass away during the term of your life insurance policy, your beneficiaries will receive the death benefit.
Although the basics of the term life insurance policy seems pretty straight-forward, there are always loopholes and specifics that need to be filled as with any life insurance policy. For example, depending on whether you choose a decreasing, increasing or level policy, the death benefit may not stay the same through the term that you have chosen.
In addition to choosing the details within the insurance policy, you need to understand what your choices are after the term is over. If you want the death benefit to remain the same throughout the policy and then convert to a cash-value policy once the term is over, you would choose a convertible life insurance policy with a level term. If you do not want to change over to a cash-value policy, you can choose to renew your policy.
When comparing the benefits of term life insurance against that of whole and university insurance policies, term insurance is for those who cannot afford to have higher premiums, but need the life insurance. Unlike the whole and universal options, cash-value is not built with term life insurance.
When speaking with a life insurance agent, you may need to probe for additional questions when inquiring about the differences between the available policies. The amount of commission is not as high on term life insurance policies as it is with cash-value policies, so the agent may tend to lean more towards the cash-value options. Make sure to come prepared with a list of questions so you are not swayed either way unless you have all of the facts that you need to make the best decision for you.
Tenay Brown - null
