The Importance Of Term Life Insurance
Term life insurance is not something the average person stops to think about
. In fact, many people try to avoid the subject of proper coverage altogether. With the rising cost of living, many individuals mistakenly think having no coverage means saving money.
Nothing could be further from the truth. Even financial advisors sometimes suggest to clients that they need to obtain life insurance quotes.
What is Term Life Insurance?
This is coverage that is offered for a predetermined period. The client has protection only for that period. When it ends, he must decide whether to buy a new life insurance policy. If the insured person dies while the contract is in force, then the listed beneficiaries will receive payment.
Life insurance has a number of advantages, including:
* Payments remain fixed during the period. In other words, the rates will not change while the policy is in force.
* The client can obtain a death benefit comparable to other types of policies at a relatively low cost.
* The specifics of the contract are generally simpler than with other policies.
* It allows individuals to make plans for the immediate future. For example, the policy could last until the applicant's children have all graduated from college. That way, the parent could be comfortable knowing that in the event of death, school expenses would still be covered.
Buying Term Life Insurance
There are a number of providers in the market, and a decision should rest on what is best for the buyer. The life insurance policy must allow the flexibility to keep sight of long-term goals while dealing with immediate needs.
This does not mean that the prospective buyer has to be particularly savvy to the vagaries of insurance rates. It calls for basic understanding of the market and asking the right questions.
Getting life insurance does require some amount of planning on the part of the buyer. Basic steps that he or she should follow include:
* Be truthful when dealing with an agent. Remember that payment depends on the policy owner being honest with the company.
Be straightforward about personal habits and anything else that could affect the arrangement. Being less than truthful can impact the payout to beneficiaries if anything should happen to the buyer.
* Try to get coverage that will protect you at a time when it could be difficult to get coverage; such as having a major medical age-related condition that is terminal. Individuals in their 60s and older often have difficulty getting good quotes for coverage.
* There is no need to go overboard on coverage. Ensure that it adequately covers your needs, as there may be other expenses over the duration of the policy. At the same time, when buying term life insurance, saving money should not be your main concern.
With rising rates it is important to explore the possibility of getting coverage regardless of how small it may be. Getting multiple quotes allows you to make comparisons on benefits and costs before making a final decision.
Many people might prefer this option since it gives them a chance to know what is available and what they may need to spend. Having this information helps in making a more informed choice when it comes time to call an agent to buy a policy.
In these uncertain times, having adequate coverage is important. It could mean a spouse and children being able to meet expenses after the death of a loved one.
In spite of its name, term life insurance is not much different from other types of policies. Coverage can be had for a period as short as one year. Policyholders can also explore renewal options. It should be kept in mind that the rates will likely increase with each renewal of a life insurance plan.
by: Brian Greenberg
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