Term Life Insurance Policies
Term life insurance is the simplest and often most affordable form of life insurance. Term life insurance provides coverage for an agreed-upon period. The term of a policy can be 5, 10, 15, 20, or 30 years. Premiums generally increase if you want to renew the policy after the term expires. Even so, term life insurance is usually cheaper than other types of life insurance, such as whole life.
The difference between term life and whole life is that with whole life, you are insured for the duration of years you are alive and you pay premiums for a longer time. Whole life will pay a death benefit whether you die at 25 or 95. Term life insurance pays a death benefit only if you die during the term of the policy. For example, if you die the day after the term expires, no death benefit is paid. Because it's less likely that you will die during the time window specified by term insurance, the premiums are usually less expensive.
Younger people often choose term life insurance because they can get higher levels of coverage at a younger age. This is especially important if you want to be sure that your family is provided for in case of your death. Taking out term life insurance and renewing it during the duration of your mortgage, for example, will assure that your beneficiaries will be able to cover the debt if you die unexpectedly during the term of either the mortgage or the insurance. If you don't die and the mortgage is eventually paid off, your need for insurance will decrease and you will have the option of not renewing your policy.
Some term life policies are convertible to whole life or permanent life. As you age, and the likelihood of your death increases, the benefits of having whole life rather than term life increase. In addition, many insurance companies will allow you to convert regardless of the state of your health. It makes sense to choose this type of policy, because it will give you affordable coverage when you need it and comprehensive coverage as you grow older. Regardless of what type of insurance you're interested in, you should do your homework and obtain several quotes from reputable companies. In this way, you'll be able to make an informed purchasing decision.
