Term life insurance is sometimes referred to as "pure life insurance".Rather than protecting someone for the entire duration of their life, it covers only a specific time period.There is no cash value, and if the insured has not deceased at the end of the term, no money is paid out.As a rule, term insurance is renewable every five to ten years, or whatever the specific duration of the term might be.At the end of one term, or on an annual basis, your insurance company will calculate a new, usually higher premium that reflects the greater chance of death, as the terms extend throughout your life.If you wish your premiums to remain basically the same, they will buy less insurance at the end of each term.If you want the same face value as far as the insurance is concerned, you'll have to pay a higher premium.You can select the time period that works the best for you as your "term".Renewable term insurance policies usually are available in five, ten, 20 and 30 year terms.If the period of your contract lasts longer than a year, your insurance company will usually calculate new premiums on an annual basis.Term insurance is different from straight life or full life insurance, since those policies remain in force until the death of the insured, as long as the premiums are paid.Those policies may also have a cash value, and you can sometimes borrow against them.The rules may vary somewhat from one insurance company to the next, but you generally cannot borrow against a term life insurance policy.Term insurance is especially valuable for insured people who want the most coverage for the lowest cost over a specified time period.For example, parents whose incomes are being over-utilized for living expenses may be saving for their children's college funds.They can purchase greater amounts of term insurance for those years than they could purchase with straight life policies.People who have set financial obligations that have an end date set can also buy term insurance for that period of time.This is common with people who have home mortgages.You'll find that term insurance may be an easily understood form of insurance.You pay your premiums either monthly or annually, and your family will remain protected for that period of time.Term insurance is valuable for providing for your family's income loss if the main wage-earner passes away.It can also help you in covering yourself for needs and debts in the short-term.You may want more protection from your insurance while you are raising your children.In addition, term insurance can provide longer time periods to help in paying college tuition costs or in paying off a mortgage.Keep in mind the time of life when you are signing up for, or renewing, a term life policy.There are times in your life when you definitely need extra protection, in case you die during an important time in the life of your family.Many term policies are guaranteed to be renewable up to a specific age, and the premiums will increase as you age.
Subscribe to:
Post Comments (Atom)
Post a Comment