Is term life insurance right for you ?
If you've spent any time at all watching television recently, you've probably seen commercials
Hot Topics
- If my life insurance policy is “Rated”, what does this mean?
- If your policy is “rated” it means that the insurance company believes you represent an above average risk of a claim.
- Can Life Insurance be arranged quickly?
- It is dependent upon two factors: - Click here to find out more details
- What are the most common optional extras available on life insurance policies?
- When considering the purchase of a life insurance policy you are almost certainly going to be offered additional extras that maybe added to the plan. The following three are the most common: -
- Laws and Life Insurance
- The following Questions represent the legal aspects of Life Insurance we think you will be most interested in. The information is not definitive nor is it exhaustive but simply an introduction into the legalities involved.
The truth of the matter is that you DO need life insurance, and there really is affordable coverage out there to meet your needs. There are two main types of life insurance, whole life and term life. The less expensive of the two is term life insurance.
What is Term Life Insurance?
When you buy term life insurance, you're purchasing a policy that will provide protection for a certain period of time. A 'death benefit' is paid only if the person insured dies during the term of the coverage. Most insurance companies have set coverage period lengths you can choose from. These coverage periods could be as little as one year at a time, but most often are offered in five or ten-year increments.
As the policyholder, you get to decide who will receive the benefit payment in the event of your death. You should know, though, that some states and insurance companies have requirements concerning who can or must be designated as the beneficiary. For example, certain states require that your spouse be the beneficiary if you're married, and some insurance companies will not allow you to name your pet as the beneficiary (too bad for Fluffy, you won't be setting her up with a golden doghouse and steaks for life!). However, within limits, you can leave the benefit to anyone you like or to your estate to be divided up according to your will.
The biggest downfall of term life insurance is that you have to die before your family gets anything out of it, because the benefit is only payable when the policyholder dies. The policy itself has no cash value, and you can't borrow against it like you can with whole life policies. Another negative aspect of term life insurance is that it becomes more expensive as ( loans ) you get older. And, speaking of age, you don't have the right to continue the policy regardless of your age the way you can with whole life.
You might be familiar with term life as a benefit that employers offer to their employees, but that doesn't mean you can't purchase an individual policy for yourself. On the contrary, many insurance companies offer individual term life coverage. The only trick is to determine what type of term life insurance is best for you.
What Kinds of Term Life Insurance are Available?
There are three different kinds of term life insurance. Each of them has ( cheap loans ) unique aspects that make them the best choice for certain situations. The three types of term life are:
Depreciating Term Life: Depreciating term is used as a means to cover a mortgage loan in the event that someone dies prematurely. The amount of the benefit goes down, or depreciates, as the amount owed on the mortgage is paid off (a slow and painful process...). This is an excellent option if you're concerned about your spouse's ability to pay the mortgage payment after your death. The popularity of these plans has waned because level term life policies are generally cheaper.