- The Decreasing Term Life Insurance Policy
Although many life insurance policies can be used to pay off a
mortgage
balance in the event of death the
decreasing term life insurance
policy is the best known and most used. This is truly an affordable life insurance policy. If you, for example, made a down payment of $60,000 on a $200,000 house you would initially owe the mortgage company or bank $140,000. You would pay off the balance over a 20 year period. You want to be certain that your
family
would get the house free and clear in the event of your death. Your concern is that you want to be assured that your wife and children can continue to live in the house even if you are not there...
Decreasing term life insurance, a very affordable life insurance policy, was specifically designed for such an eventuality. The face amount of the policy decreases in a uniformed manner. Upon your death the balance owed would be paid off. The fact is your
beneficiary
would be paid the money by the
insurance company
and she would in turn pay the bank or mortgage company. If you choose an alternative arrangement can be made to pay these financial organizations directly. The premiums are very affordable. This is truly an affordable life insurance policy. There are other policies that can used to do the same job...
- The 20 Year Term Insurance Policy
The
20 year term insurance
policy is another affordable
life insurance policy
that is often used to pay off a mortgage balance in the event of your death. This costs a little more than the decreasing term policy but the additional premium may be worth it. The death benefit does not decrease like the above-mentioned policy. It remains level for the entire 20 year period...
Now let us assume you died after 15 years. Let us use the above situation as an example. With the decreasing term policy all that would be paid upon death would be what is owed. In the case with the 20 year level term policy the entire $140,000 would be paid to the beneficiary. The beneficiary would pay the amount owed and keep the balance. I believe you will like the 20 year,
level face amount,
policy. The premiums also are level...they never increase.
- The 30 Year Term Life Insurance Policy
Another very popular and affordable life insurance policy is the
30 year term life insurance
policy. The benefits of this policy are very similar to the 20 year term policy but with one difference. The duration is for 30 years instead of 20 years. The premiums are a little higher than those of the 20 year term policy but still low enough to be considered an affordable life insurance policy.
This policy is used for other types of situations. You are a parent. You have two children ages 3 and 5 for example. You want to be assured that they will be well taken care of financially until they graduate college. You know that as long as you are alive you will be able to fulfill this desire, but what would happen to them if you died prematurely? The 20 year term policy or the 30 year
term life insurance policy
can be used to take care of this eventuality...
What you need to do is to buy a large enough life insurance policy to guarantee a sufficient lump sum or income. This income should be an amount equivalent to at least 60% of your present earnings until your 3 year old graduates college. The cost is much less than you may think...check it out.
Business people often need an affordable life insurance policy especially if the business is fairly new. They may need a policy to fund a
buy-sell agreement
or for
key employee life insurance.
