Term Life Insurance: A matter of life and death!
Life insurance is truly a matter of life and death. Making a purchase of life insurance is planning for after a death. When in good health, people tend not to think about their mortality, however planning for after their death is as important a decision as any made during life.
After deciding to purchase life insurance, one must make a decision as to which life insurance company to utilize. You should check into the financial stability of the company you choose and ensure they have the financial strength to be able to pay claims in the future. You can accomplish this by making contact with your state, county, or province insurance commission. Next is to determine what type of insurance you may want and how much coverage you need. There are two main divisions of life insurance: Permanent and term insurance. Within these categories are many sub-types. Amount of coverage is dependent upon many factors, i.e., age, state of heath, marital status, financial circumstances, and the number and needs of survivors depending upon you and your income.
Whole life insurance is permanent and covers your for your entire life, doesn't need to be renewed, and will not expire or lapse provided the premiums are paid in a timely manner. There are many types of permanent insurance and rates for this type of insurance are higher than term insurance.
Term insurance policies provide coverage for a fixed period at a pre-fixed rate. When the term expires so do the rates and the insured must make a decision to accept a higher rate of premium or allow the policy to lapse. Term insurance is the least expensive way to purchase a substantial amount of insurance when compared to premium costs.
As with permanent life insurance, there are many types of term life insurance. Most common are level term insurance, renewable term insurance, increasing/decreasing term insurance, convertible term insurance, and return of premium term insurance.
With level term insurance the premium and the face value of the policy remain the same during a premium paying term you set, usually between five (5) and thirty (30) years in five (5) year increments. If the insured dies within this term, the company will pay the face value of the policy to the beneficiary. Renewable term insurance provides a special feature that allows for the renewal of the policy after the initial term at a higher rate of premium dependent upon the insured higher age.
Increasing term insurance provides for the annual increase of coverage and premium, while one should use decreasing term to cover a specific type of debt, usually a mortgage.
Convertible term allows the insured to convert the term policy to permanent insurance with no penalty.
Return of premium term insurance is a new product and allows for the return of all premiums if the insured is still alive at the end of the term.
After deciding to purchase life insurance, one must make a decision as to which life insurance company to utilize. You should check into the financial stability of the company you choose and ensure they have the financial strength to be able to pay claims in the future. You can accomplish this by making contact with your state, county, or province insurance commission. Next is to determine what type of insurance you may want and how much coverage you need. There are two main divisions of life insurance: Permanent and term insurance. Within these categories are many sub-types. Amount of coverage is dependent upon many factors, i.e., age, state of heath, marital status, financial circumstances, and the number and needs of survivors depending upon you and your income.
Whole life insurance is permanent and covers your for your entire life, doesn't need to be renewed, and will not expire or lapse provided the premiums are paid in a timely manner. There are many types of permanent insurance and rates for this type of insurance are higher than term insurance.
Term insurance policies provide coverage for a fixed period at a pre-fixed rate. When the term expires so do the rates and the insured must make a decision to accept a higher rate of premium or allow the policy to lapse. Term insurance is the least expensive way to purchase a substantial amount of insurance when compared to premium costs.
As with permanent life insurance, there are many types of term life insurance. Most common are level term insurance, renewable term insurance, increasing/decreasing term insurance, convertible term insurance, and return of premium term insurance.
With level term insurance the premium and the face value of the policy remain the same during a premium paying term you set, usually between five (5) and thirty (30) years in five (5) year increments. If the insured dies within this term, the company will pay the face value of the policy to the beneficiary. Renewable term insurance provides a special feature that allows for the renewal of the policy after the initial term at a higher rate of premium dependent upon the insured higher age.
Increasing term insurance provides for the annual increase of coverage and premium, while one should use decreasing term to cover a specific type of debt, usually a mortgage.
Convertible term allows the insured to convert the term policy to permanent insurance with no penalty.
Return of premium term insurance is a new product and allows for the return of all premiums if the insured is still alive at the end of the term.
