Explore Term Life Insurance For Your Needs
We've all seen the TV commercials-term life insurance for just a few dollars a month
. While these advertisements may be based on very favorable situations, the general premise is true. Term life insurance is the simplest and most inexpensive form of life insurance. And it can provide the peace of mind that comes from protecting your family at a very low cost.If you have talked to agents who are trying to get you into different types of insurance or plans with very high benefits, you might not be getting the best deal for you. Term life insurance policies work well for many different kinds of people depending on their needs.
Term life insurance provides the largest immediate death benefit for the minimum premium dollar. When compared to traditional whole life policies, term life insurance is substantially cheaper. Its reasonable rates allow for the purchase of much larger coverage than can be afforded from permanent life insurance.
Term insurance covers you for a specified period of time, usually 5, 10, 20, or 30 year periods. As the name implies, term insurance is temporary, for a set period of time. Unlike universal or whole life insurance it does not accumulate cash value.
When planning for your family's financial future it's important to keep in mind that term life expires and it is possible to outlive your policy. If you're looking for permanent insurance that builds cash value whole life insurance may be the answer for you.
Term life insurance on the other hand is often referred to as pure insurance protection because it builds no cash value. Its primary purpose is to provide for the financial responsibilities of the insured in an affordable manner.
You now need to determine how much you need. There are several methods used to calculate an individual's need for life insurance. The most agreed upon rule of thumb is that an individual should be insured for about 10 times his or her annual salary. If the insured makes $50,000 a year, a policy in the amount of $500,000 would be appropriate.
This is the simplest of all the methods for obvious reasons. This is the most comprehensive method. All upcoming expenditures are reviewed to determine the amount of insurance needed. Total assets are subtracted from the total financial obligations to determine the amount of life insurance needed.
These obligations commonly include mortgage payments, future educational expenses, and future income for family, funeral expenses, and more. There are different types of term life insurance as well.
After settling on a suitable policy amount it's important to find the type of policy that is best for you. Decreasing term - The amount of death protection you purchase decreases over time, but your premiums stay level throughout the term of the policy.
Decreasing term is typically purchased by those who expect their insurance needs to diminish over time. Some examples would be to cover a mortgage or a business loan.
Both of which would have decreasing obligations over time. Families with younger children often utilize decreasing term insurance; as the children age the need for insurance diminishes up until they leave the nest.
Annually Renewable Term - The amount of death protection you purchase will stay the same, but your premiums increase every year. These policies are typically purchased by younger individuals looking for an inexpensive policy when they're young, but as they age the premiums become more costly.
Without a doubt straight term offers the best bang for the buck of all the life insurance types. Combine that with the fact we're living longer healthier lives and you've got a pretty attractive arrangement.
The number of deaths in individuals age 25 to 44 has decreased significantly over the past ten years, resulting in individual life insurance premium price drops of 5 percent on average since 2000. Term life insurance may be one of the best deals in town, but it pays to shop around when looking for a term insurance quote.
You'll want to find a qualified agent that isn't tied to just one single insurance company. This provides you with the ability to choose the most competitive rate from a number of high rated carriers. It is highly recommended that you choose an "A" rated company or higher.
After all you'll want your insurer to be around when you're 20 years into your policy.
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