Understanding Term Life Insurance
Finding low cost life insurance can be a challenge. Term insurance is typically the most affordable type of life insurance because it covers a specific period of time instead of providing “whole life” insurance. If you’re young and on a budget, just starting out with a family, or even if you’re older and only have a limited need for life insurance, then term life insurance may be right for you.
Term Life insurance is simply life insurance for a specific term, such as 5, 10, 15 or 30 years. Many term policies and options are available to choose from, so this type of insurance can easily be tailored to your life insurance goals.
There are several important features of term life insurance:
· It offers you great flexibility; you can buy a policy for a term that can range anywhere from a one-year renewable policy, to a 30-year term, or an age specific time in your life such as 65 years, among other options.
· Term life insurance pays out non-taxable death benefits to the beneficiary.
· Term life insurance premiums are considerably cheaper than permanent life insurance policies.
· The amount of death benefit you choose is also very flexible; you can buy anything from a $5,000 policy to a $1,000,000 policy or more.
· When you buy a term policy, the annual or monthly premiums you pay are fixed and guaranteed for the term of the policy. At the end of the term you will be given the option to renew the policy, at which time you can alter it to suit your changing needs.
· Many policies also offer you the option of converting your term policy into a permanent life insurance policy such as a universal life policy.
· It’s easy to get approval. If you are relatively young and in average health you won’t be required to take a medical exam. Most people simply have to complete a questionnaire to get approval. Even as you get older, medical exams assicaited with term life insurance are fairly simple and straight-forward. Taking the exam will typically save you money because the insurance company can more fully measure your health risks.
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