There are advantages to buying term life insurance as well as
disadvantages. Let us look at both sides of the coin and see whether
this policy is good for you or not. You make the decision.
Term insurance can be very inexpensive, this depends on the type you elect to buy. The term period is very important, be very certain to select the best policy.
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Term Life Advantages And Disadvantages
When you buy a term policy you are buying death benefit. Think
of this as a purchase of money. Money for your loved ones after you are
dead. This money will pay the funeral expenses. It will make the
mortgage payments when you are no longer there to take care of it
In addition your term life policy will guarantee that food is
always on the table for your spouse and children, it will guarantee that
they will continue to wear nice clothing. Your children can continue to
go to the same school...they won't need to change schools because of
lack of funds. You family will continue to drive around in the same car
or a better one.
is inexpensive insurance and most people, as long as they have an income, can afford to buy these policies.
If you, on the other hand, have a large estate, term insurance can guarantee that your estate is not depleted by
upon your death. Some people may prefer to buy whole life or other
permanent types of insurance but the fact is that term insurance is less
Term life insurance offers you a death benefit for a specific
number of years. You decide on the period at the time of purchase. You
can buy your policy for 1 year, 5 years, 10 years, 15 years, 20 years,
25 years or 30 years. Some life insurance companies offer policies that
last to age 65, age 80, age 85, age 90 or age 95.
Although the premiums for term policies are usually
you may find some with a premium that increases at certain points during the life of the policy. The
yearly renewable term Insurance policy
, for example, has a premium that increases every year.
The death benefit of these policies usually remain level except for the
decreasing term policy
. This policy is usually used to take care of the amount owed on a
mortgage upon the owners death. Each year the face amount of this policy
decreases as the mortgage balance decreases.
Some life insurance companies allow the owners of term life
policies to renew their policies after the initial term period. They
usually require additional evidence of insure-ability to effect such
renewals. There is usually an increase in premiums.
Term policies usually offer the privilege of converting the policies within a specific period of time...for example, a
20 year term policy
may be converted within 14 or 15 years. The policy owner can convert to any permanent life insurance policy...such as
and it's derivatives,
variable universal life
There are certain disadvantages to buying term life insurance.
You have to die to win. You pay your premiums every year because you
want to protect your family. This is inexpensive insurance so you had no
problems with these payments. 20 years go by and you didn't die. You
have nothing to get back from the life insurance company. It is a fair
deal as you were only paying for death benefit.
On the other hand, had you purchased a permanent policy you could
keep it forever but if you chose to stop in 20 years for example you
would likely get back a good portion of the premiums you paid. If you
you may actually get back all your premiums at that point. Dividends
are not guaranteed so the life insurance company is not allowed to
project that this will happen.
Permanent policies cost more than term policies so your choice
may depend on how much you are able, or are willing, to pay for your
- Minimums And Maximums
Each life insurance company may set a minimum amount of life
insurance that they are prepared to issue. This usually depends on the
age of the applicant. There is usually no maximum as long as one can
qualify for the policy applied for. If the company selling the policy is
not a large one they usually sell your policy to a larger company. This
is called "reinsurance". There are life insurance companies that
specialize in "reinsurance".
There you have it...term life or permanent life insurance...you decide which is best for you.
There is nothing more important than your family's security. What would
happen to your family if you died? Would they be provided for? Compare
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