Wednesday, December 19, 2012

Term Life Insurance

 
Protection for Your Family for a Specific Period
 
Life insurance is a way to protect your family in the event of your death. The money your beneficiaries receive can be used to pay your final expenses, take care of debt and cover the mortgage or rent.
Term life insurance provides protection for a specific period of time, or term. It is most often sold in 10, 20 or 30 year terms. The premium stays the same throughout the term. If the insured person dies during this period, the beneficiaries receive the proceeds tax-free. At the end of each term, the insured may renew the policy (generally at a higher cost) up to age 95.
Find out more in our 5-Minute Guide to Term Life Insurance (PDF).

Advantages and disadvantages of term life insurance

Term life insurance can provide essential protection for your family. It is less expensive than other life insurance options, so you can feel good about the amount of coverage that you can purchase and stay within your budget.
The downside of term life insurance is that it isn't a permanent life insurance solution. Once the term ends, the coverage ends or the premiums increase dramatically. And, the older you are, the more expensive it gets.
Fortunately, you can convert many term life insurance policies to a permanent insurance product such as whole life insurance, universal life insurance or variable universal life insurance.
If you want to purchase another policy after your term ends, you may have to show evidence of good health to purchase continued protection. An annual renewable term policy may not require this, but your premiums may increase each year.
Keep in mind that as your life changes (for example, marriage, birth of a child or a job promotion), so will your life insurance needs. You should weigh any associated costs before making a purchase. Life insurance has fees and charges including costs of insurance that vary based on the insured person's gender, health and age. There are additional charges for riders that customize a policy to fit your individual needs.

2 comments:

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