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Thursday, November 20, 2008 |
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What is Affordable Term Life Insurance?
Affordable term life insurance covers you for a specified period, usually one, five, ten, fifteen, twenty, or thirty years. If you die while the term life insurance policy is in effect, the insurance company pays the face amount of the policy to your beneficiaries. If you outlive the policy, nothing is paid to your beneficiaries and no cash value is built up in the policy itself. Therefore, term life insurance is the most affordable type of life insurance available.
Some term life insurance options include:
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Convertibility — Many term life insurance policies can be converted to whole life or universal life policies, which allow you to use all or most of the premiums you have paid to offset the cost of the new policy.
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Renewability — Some term life insurance policies allow you to renew your policy when it ends without having to go through the process of reapplying for coverage. This feature is useful should your health condition change since first qualifying.
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Combined term — Term life insurance policies can cover more than one person, paying a death benefit when one of the two people covered by the policy dies. This is a useful way to be sure that a surviving spouse has adequate financial resources.
Advantages of Affordable Term Life Insurance
Term life insurance is the most affordable life insurance since it provides coverage only for a specified period of time with no accumulation of cash value. For this reason, this type of insurance is commonly referred to as pure protection. If cost is the most important factor, you should consider affordable term life insurance.
Affordable term life insurance may make sense for you if you:
- need a high level of coverage for a specific period of time, perhaps while you are raising a family, have a mortgage, or have other responsibilities.
- are price sensitive.
- do not want to use insurance as a way to build your investment portfolio.
Related Topics: What is Burial Insurance?
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