Term Insurance Policies Explained
Term insurance is known as temporary insurance.
If the correct policy is applied to the correct temporary need it will
work well for policy owners.
Some needs are short term and some long
term but temporary just the same. On the other hand there are permanent
needs for life insurance which will be there for the rest of your life.
If you have a permanent need you need to buy a permanent policy
like universal life, variable universal life, variable life or whole
life insurance. There are many types of term insurance policies. Let us
look at the need and which policy to apply to that need.
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Term Insurance In Action
- Your Mortgage
If you have a mortgage on your house you need insurance.
You need a homeowners policy that would provide sufficient cash to
repair or rebuild your home in the event of destruction by fire, flood, a
hurricane or any other natural disaster.
It is also important to own a disability insurance
policy that would provide a portion of your income in the event you
should become disabled. You certainly would want to have your mortgage
paid off in the event of premature death...wouldn't you?...
As you will have that mortgage for a specific period of time that
can be categorized as a temporary need. Most people buy decreasing term
life insurance to fulfill this need. If you have, for example, a 20
year mortgage you would buy a 20 year decreasing term
life insurance policy.
As the mortgage balance decreases the death benefit
decreases as well. Upon death the mortgage balance will be paid off by
the term insurance policy proceeds.
- Paying Off A Loan
Suppose you buy a new car. You put down a small down payment
and you will pay this off in about 5 years. If you suddenly died that
money is still owed to the bank and they will likely come and repossess
If it is your desire that a relative or friend should own that
car and you include that in your "last will and testament" it would
make sense to buy a 5 year term insurance policy in the amount owed on
Upon your death the amount owed will be paid off. If there is
any money over and above the amount owed coming from the policy your
beneficiary will receive the balance.
- Protecting A Young Family
One of the most devastating experiences a young family can go
through is the death of the breadwinner. You are in your mid twenties
and married. Your wife is about the same age and you have two children
ages 3 and 1.
Although your wife graduated college you both came to the
decision that she would stay at home for a while and look after the
children. Through the carelessness of a drunk driver you are killed in a
Try to imagine the situation the family
will be in. There are final expenses to be paid. Court costs and
attorneys fees, burial costs have to be paid while your wife and
children have to continue living.
Rent or mortgage payments have to be
made as well as utility payments. The biggest bill will be the
maintenance of the family until they can fend for themselves. All these
things can be taken care of with a well thought out 20 year or 25 year
This term insurance policy can be designed to pay a small lump
sum up front to cover the immediate needs. The balance would pay an
income equal to your present income for a specific period of time.
income coming from your term insurance would last until your children graduate college. It could even be set up to pay an income for as long as your wife would live.
It is recommended that you use carriers rated A or better by A.M. Best.
Term Insurance - 2
Decreasing Term Life Insurance
5 Year Term
10 Year Term
15 Year Term
20 Year Term
25 Year Term
30 Year Term
Yearly Renewable Term
Affordable Term Life Insurance
Low Cost Term Life Insurance
Return Of Premium Term Life
Cheap Term Life Insurance
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