TERM LIFE INSURANCE
Term life insurance is one of two basic types of life insurance. The alternative is permanent life insurance. Both types have some advantages and it’s really a matter of preference as to which is best for you.
When you purchase term life insurance, you pay a premium and the policy is then put in place for a specific amount of time or “term.” The term varies but a monthly premium is very common. By contrast, permanent life insurance is an agreement between you and the insurance company that you will keep the policy in effect on a permanent basis.
One of the major differences is that term life insurance premiums may change without notice. When you lock the price of permanent life insurance in, that price is to remain constant throughout the life of the policy. For those young people who are smart enough to take out a permanent policy, the advantage is that those low rates will remain the same.
Another advantage of the permanent life insurance over the term life insurance is that permanent insurance policies can be used as collateral or borrowed against. This happens as the amount paid in premiums begins to build up. Term life insurance is only paid upon the death of the insured and there’s never a cash value to the term life insurance policy.
On the other hand, term life insurance is usually much easier to obtain. You can often get a term life insurance policy without a physical of any kind. All you need to do is sign on the dotted line and start making premiums.
Finding an agent for a term life insurance policy is also pretty easy to accomplish. You’ll find lots of online sources of term life insurance and that’s a good way to get some rates for the sake of comparison. If you have a good idea of the amount of term life insurance you need, you can quickly get an online quote to determine how much the premiums are going to be.
The amount of term life insurance you need depends on what you hope to accomplish with the policy. Remember that the term life insurance policy will never be of any use to the insured until death. If you want the policy to pay off funeral expenses, you’ll probably be needing a policy for around $10,000. Most people are hoping to leave their loved ones and family with enough cash from the term life insurance policy to pay off debts and keep the family going. That might mean you want at least a $50,000 or $100,000 policy.