Term Life Insurance Defined
Term life insurance is purchased for a specific length of time or "term." It is usually the life insurance coverage with the lowest premium payments. Term life insurance neither accrues a cash value, nor pays out if the insured is alive at the end of the term. In essence, term life insurance is protection for your loved ones in the event of your death.If you do not make your payments on time or do not renew the policy at the end of the specific time that it is enforce, your benefits are no longer available to your beneficiaries if you should pass away. You can name one beneficiary or several beneficiaries to share the death benefit.
The amount of your death benefit does not increase or decrease over time. In other words, your policy will not increase even if the insurer's portfolio or stock rises in value. Thus, you purchase term life insurance for a flat amount of coverage and that coverage doesn't change over the term of your insurance.
Some term life insurance policies do not require you to take a physical examination if you fall within a defined age range. However, once you reach a certain age, term life insurance may not be available or if available will carry a high annual premium payment because your age becomes a risk factor of your insurance coverage. Even if the premium payment is more than you would like to pay, you should consider term life insurance coverage as an investment in your family's security. Once the death benefit is paid, your family will be able to use the face value of your term life insurance policy to payoff debt, like a home mortgage. The family home would then be owned out-right, which can help your family if the loss of your income will create undue hardship.
There are many reasons to consider purchasing term life insurance, but the most important reason of all is to protect your family's assets after the benefits are paid. It is a legacy that will help them for years to come.
posted by Insurance Advantage @ 1:25 AM
<< Home