How Best To Use The 20 Year Term Life Insurance Policy

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• Have you ever looked at the 20 year term life insurance policy?

• Have you examined how it works?

• Do you think it is a good policy for your particular situation?

• Are you thinking about using the 20 year term life insurance policy to protect your family in the event of your premature death?

• Are you in business? Would you use this policy to fund a buy sell agreement or may be for key man or key employee insurance?

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Regardless of how you plan to use the 20 year term policy you have chosen a good policy to check out. This is probably the most bought term policy. Let us see why.

What Makes This Policy So Outstanding?

• This policy maintains a guaranteed level death benefit for the duration, 20 years. It never decreases.

• The premiums of this policy are also guaranteed level for the 20 year period in most cases. In some cases the premiums start out lower than usual and increase after a period of time, for example 10 years. The premiums usually remain level for the second 10 year period as well.

• The proceeds payable at death are usually paid out free from Federal Income Taxes. If the policy is a part of ones estate the proceeds may become taxable.

• The owner of the 20 year term life policy has the right to convert the policy to a permanent policy within a specific number of years. No evidence of insurance is required. I refer to a medical examination or inspection report.

• Like any other life insurance policy the proceeds of the 20 year term life insurance policy can be paid out either in one lump sum or in the form of a monthly income.

• Premium payment can be made once per year, twice per year, four times per year or on a monthly basis.

Why would a person buy a 20 year term life insurance policy?

The 20 year term life policy was designed to fulfill temporary needs for life insurance coverage but many people now think of this policy as a permanent solution.

• This policy is bought mainly to protect a family in the event of the death of the breadwinner.

• This policy can be used to fund a buy sell agreement in the event of the death of a business partner or a stockholder of a corporation.

• This policy can be used for key man, or to be more politically correct key employee , insurance.

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If you choose the 20 year term life insurance you have the option of adding the waiver of premium rider to the base policy, at a minimal extra premium. This rider simply states that if you should become disabled the life insurance company will waive your premiums. Whenever you are able to go back to work you pick up the premiums again. You must, however, be disabled for a minimum period...6 months with most companies.

You can also add the accidental death benefit rider to your 20 year term life insurance policy, also at a minimal cost. This rider simply states that if you should die in a accident the life insurance company will pay twice the face amount of the policy to your beneficiary. This is most commonly referred to as the double indemnity clause.