It is a common misconception that life insurance must be costly and complicated. In reality, term life insurance is a viable option for many individuals or families who think they have no options when it comes to this type of coverage. There is no reason to leave loved-ones in a financial disaster in the event of an untimely death. To clarify, a term policy allows the policy holder to select the coverage amount to be paid to his or her beneficiary and the length (or "term") of the policy (this is typically one, five, ten, fifteen, twenty, thirty, or thirty five years). These policies come with a very affordable monthly premium that does NOT change over the entire term.
Term life insurance comes with several advantages over permanent life insurance (policies which combine an investment product with life insurance). Perhaps one of the most appealing advantages is the simplicity of a term policy. It is simple to understand and allows for personal choice. The policy holder is in control of the amount of coverage and the length of the coverage. Controlling these factors allows an individual to obtain a monthly premium that will work with his or her budget. It is VERY feasible for a healthy, 30-year-old male to obtain a half a million dollar policy for fifty dollars a month.
By NOT investing money into a permanent policy, the insured can choose where and when to invest his or her hard earned money. Insurance companies are often conservative with their investments. A young, financially-savvy person would likely do well to invest in other avenues. And even the "financially-unsavvy" can obtain the services of a good broker who can invest their money in higher-yielding opportunities.
Term life insurance is good for short-term needs. For younger families who do not have a large nestegg or savings built, the unexpected death of the breadwinner would likely make mortgage payments and college tuition nearly impossible. With a term policy, these younger families can rest assured that, in the worst case scenario, loved ones will not lose their homes and dependents can continue their higher education.
Life insurance IS possible on almost any budget. There are additional tips that can help an individual get even better coverage at an even lower premium. Buying a policy when young and healthy for a thirty or thirty-five year term will provide a very low premium. Also, shopping around for the best rates can yield some excellent deals. It is easy to feel overwhelmed by life insurance, but it's protection that is priceless.
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Term life insurance should be carefully researched before you make a decision to buy.
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357
Date Published :
Feb 18 2009