5 Year Term Life Insurance Is Pure Life InsuranceHome
At the end of the five year period there is usually no more insurance in force. Some insurance companies, however, allow you to renew the policy for another five years at a higher premium rate and, in some cases, with new evidence of insurability...such as that is a medical examination. Other life insurance companies require no evidence of insurability to renew the policy for an additional 5 years. 5 year term life insurance is inexpensive life insurance. The policy accumulates no cash value nor do dividends apply. This is a good choice if you have a need for a large amount of life insurance and have limited spendable income. This could be a good choice for a young married couple who are aggressively saving for a house or young people who are working hard at accumulating cash to cover the costs they will incur when their upcoming baby is born. Young singles who are maximizing their saving and investments could find this cheap life insurance extremely helpful even though their need for life insurance is limited. They only need life insurance to cover their last expenses and, in some cases, outstanding uninsured debt. This 5 year term life insurance policy can be used by business people to cover outstanding loans or to cover a surviving partner in the case of death...while a company is in it's infancy. The principals of the company can also use this policy to protect the company in the event of the untimely death of a key employee.
The death benefit is free of income taxes, if it is not part of an estate. In other words if the policy is not part of a will there are no income taxes payable on the proceeds. Your 5 year term life insurance policy can be converted, entirely, or in part, to any permanent life insurance policy at any time...as long as it is in force at the time the conversion is requested.
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