Term life insurance
differs from permanent insurance, in that it is only good for a term,
typically from a year to thirty years. The policy needs to be renewed at
the end of each period or term and has no actual cash value. In the
event of the death of the insured before the end of the specified term,
the beneficiary would then be paid.
As with any financial product or service, it pays to shop around. The
Internet has made it easy to find low cost term life insurance and to
compare policies, features and costs. It's also relatively easy to apply
for a policy online; the entire process can often be completed in as
little as a few minutes.
Perhaps the biggest advantage of this type of insurance is that it is
usually less expensive than permanent insurance. Because the amount of
the monthly premiums are lower, this type of insurance allows you to
purchase extra coverage while young - a time of life when many people
feel that they need more financial protection, or can afford it.
This coverage is also a good option if you need to cover an immediate
and specific short term need, such as a mortgage, or income from work.
Many policies also easily and conveniently allow you to convert the
policy into a whole life policy at some point in the future, without
having to take a medical exam or otherwise qualify.
Low cost term life insurance does have several disadvantages. As
previously mentioned, the policy has no cash value and the amount of the
premiums tends to increase as you grow older and maintain the policy,
unless you buy what is known as a level term policy. In fact, some
people find that the cost of the coverage can become too expensive to
continue with, leaving them uninsured.
Some policies also require eligibility requirements at the time of
renewal in order to qualify and keep the premium amount down. And of
course, a short term policy may expire before you reach your retirement
or senior years, meaning additional insurance will then need to be taken
out. If you are in poor health, it can be costly to take out a new
policy at that point.
For many people, low cost term life insurance is an ideal solution. It's
easy to find and take out and can be an ideal short term financial
solution. It is also certainly a better strategy than having no coverage
at all. Always make sure that you understand the pros and cons before
committing to a policy.
Term life insurance