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| Term Life Insurance |
What is Term Life Insurance?
Term is the lowest cost and simplest product available. Term insurance is a life insurance contract that provides protection for a limited number of years. The death benefit is only payable if death occurs during the agreed-upon term. If the insured survives the time period, the policy expires. This means it has no cash value. However, some policies have a convertible feature permitting a policyowner to exchange a term policy for a cash value policy without evidence of insurability. Term is basically designed to provide a maximum amount of protection for a temporary period of time.
Term is sold in a variety of forms and for a variety of purposes. The most common type is Level Term. This form has a level (or constant) death benefit and a level premium for a specified number of years. The most common are 1, 5, 10, 20, and 30 year terms. Decreasing Term is another version of term insurance. It is generally sold with a level premium and a decreasing death benefit. A variation of decreasing term is Mortgage Life Insurance. This is designed to decrease at the rate in which a mortgage balance decreases. Mortgage Life is typically offered as a rider in connection with a cash value policy.
Advantages/Disadvantages of Term Insurance
Term insurance is ideal for families where protection is needed, but a minimum outlay of funds is necessary. Term also works well as a supplement to cash value insurance. Another common purpose of term insurance is to purchase it as protection against debts such as mortgages, auto loans or education loans.
On the negative side, term insurance provides only temporary protection, and there may come a time when an insured has no protection after the term policy ends.
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Life Insurance Quotes Wiz provides a place to shop in private with no hassles. With a policy in place today, you can:
provide security for your family
protect your home mortgage
take care of your estate planning needs
look at other retirement savings/income vehicles
People buy life insurance - term life insurance because too often most of their other plans fail. They buy it because they realize the need of protection for their families after their death;
or for a reserve for emergencies and additional income for later years. Did you know that a life insurance policy can:
Provide cash and income needs on and immediately following death such as unpaid bills and taxes and other obligations.
Prevent a family's suddenly dropping from its accustomed standard of living after the death of the breadwinner.
Provide continuous flow of funds for the living spouse.
Allocate income funds for the children's education.
Provide a retirement income throughout old age.
Provide a reliable savings plan for the future
Supplement income when earning power is destroyed by illness of accidents, such as covering medical expenses.
Furnish surplus earnings for the investors should disaster strike
The bottom line is this: While Life Insurance is not always the insurance product at the forefront of your thoughts, Life insurance is always a friend in time of need.
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It is strongly advised that when purchasing life insurance an attorney and or a Certified Public Accountant is consulted.
There are several crucial decisions that need to be made with respect to the policy details.
Although the policy may be financial protection for your life, the owner of the policy doesn't need to be you. In many cases it is beneficial for your spouse, a trust, an estate or a business/corporation to own the policy.
The general rule that applies is that the owner and beneficiary need to have an "insurable interest". Simply put, that person or corporation needs to have a financial interest in your living.
Always photocopy your applications and any form bearing your signature. It is a good practice to keep these copies for seven years after canceling a policy.
Complete the forms thoroughly and if some question doesn't apply write "Not Applicable". Application forms are frequently returned due to incomplete information.
Make sure you know what you are applying for by obtaining a complete written proposal first.
Know what your grace period is and make certain that the insurance company receives your premium on time. Coverage can be canceled if premiums are not paid on time.
It is possible reinstate coverage if this occurs, but if you need it badly you will most likely be denied.
Ask for all options of paying your premium (monthly, Electronic Funds Transfer, quarterly, semi, annual, and annual) in order that you may evaluate your options carefully
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