Term Life Insurance- A Crash Course in Term Coverage
Term Life Insurance- A Crash Course in Term Coverage
Term life insurance is one of the more popular types of life coverage that is available today. This insurance provides protection from many different events and situations, and is unique in the way that it works. To help you understand more, here are some basic things to know about term life insurance coverage.
Coverage amount available- varies per person, up to millions if desired
Length of coverage- 5, 10, or 20 years in most cases, but other terms are available
What you get- a death benefit that is paid out when the named insured dies
Premiums- available in level or increasing policies depending on needs
Cash value- none offered for term life coverage
Biggest benefit- affordable coverage that provides exactly what is needed
Biggest downfall- the insured person has to die before anything is paid out
Guaranteed acceptance- not with all insurance companies
As you can see, the basics of term life insurance are pretty simple. There are different types of policies to choose from, but the general consensus is that this coverage is great for people who need a more affordable life insurance option than whole life policies. You will need to choose between depreciating coverage, level term, and annual renewable term life coverage when you buy a policy, so be sure to explore your options.
Depreciating term insurance is designed to offer a level premium with a benefit that decreases throughout the policy term. This is great for protecting a mortgage or other type of loan. Level term life gives a level premium and death benefit throughout the policy, and will be more expensive at first but become cheaper over time. Renewable life insurance requires the policy to be renewed every single year, but those who need short-term coverage can benefit greatly from these policies.
Whether you can't afford the premiums of whole life coverage or you need a short-term life insurance solution, there are many different elements to consider in choosing term life coverage. Make sure that you look for a policy that has accidental death coverage, waiver of premium due to disability, conversion options, and automatic renewal when the term expires so that your policy doesn't lapse and cause you to lose everything that you have invested. There is life insurance that can help you, no matter what your needs might be. If you want something short and sweet, term insurance can definitely help.
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