We need to get one thing straight. Life insurance is not for the insured but for those the insured loves and cares about. If you are married you should have some life insurance to protect your spouse in case you experience premature death. If you are a parent, you should protect your children. If you are single but expect to marry and have a family someday, it makes sense to buy life insurance while you are healthy and a young age so it will be affordable. Term life insurance is less expensive than most people think. Each carrier only has one price for term insurance so whether you purchase it with an agent, over the internet or in rare cases directly from the carrier, you will pay the same price. Now it obviously varies from one carrier to another but you would be amazed how competitive many quotes are.

Now term life insurance is available for a specified number of years, usually from 10-30. The only kind you should buy, with rare exceptions, is level term which means the death benefit and premium are guaranteed to be the same over the life of the contract. There are two types of term life insurance: regular term and return of premium (ROP) term. Regular term is like renting a house. You make payments for 10 years and then move on, but there is no residual value, you just walk away. Regular term is similar, it has no value at the end of the contract. If you die before it is over the carrier pays the beneficiary the face amount of the policy. If the term concludes and you are still alive, you simply walk away with no cash. With ROP term you get all your premiums returned at the end of the contract if you are still alive. It is like a savings account and less the actual cost of the insurance, you probably get a return on your money of 5-7%.

Often a couple is only looking for life insurance to cover their working careers so that if premature death interrupts the retirement accumulation plan, funds will be there to replace those lost earnings. Other people are interested in leaving something for their heirs and life insurance does that tax-free. The problem is none of us knows when we will die so you may need a more open ended life insurance plan called permanent or cash value life insurance. Term insurance is also used extensively in business to back up personal loans by business owners or to fund cross-sell plans for partners in a business. Many companies have written plans that if one partner dies the other(s) will buy his shares out (to provide the spouse/children with the deceased share of the business. However, if both (all) partners have not executed life insurance contracts so those plans will be funded, there probably will not be enough cash int he company to pay off the widow/family, or doing so may jeopardize the survival of the business. Term life insurance is the easiest way to solve this dilemma.