Friday, January 17, 2014

Term Life Insurance Explained

What is Term Insurance?
Term insurance ( ) is life insurance protection for a specific period of time, usually from 1 to 30 years. It is typically the least expensive type of life insurance and it ends if you outlive the period of time you select, unless you renew coverage. Term insurance simply provides death benefit protection – meaning, that it pays a death benefit to your beneficiary if you die within the term period.

Who should consider term insurance?
  • Young families and individuals, who can’t afford the higher expense of permanent insurance or who are unsure about their long term goals, and who want something affordable today with the opportunity to change their minds tomorrow.
  • Individuals who need coverage for specific needs that will disappear in time, such as a car loan or a mortgage.
  • Small businesses who need protection in case a key employee dies or who need coverage for business loans.
  • Couples who need income replacement in the event of a spouse's death.
  • Term insurance provides affordable life insurance protection for those on a limited income.
  • Term insurance provides a good way to cover or even supplement other coverage when you have added financial responsibilities for a specified period of time (i.e. mortgage, loans).
  • Term insurance premiums are generally lower than those for permanent insurance. This is often beneficial for younger individuals and couples as it allows them to buy higher levels of coverage when the need for protection is often times the greatest.
  • Term insurance may have a re-qualification option that enables the insured to obtain a new term policy.

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