Term Life Insurance Understood

By: Roger Kelley

An important part of a sound financial plan, life insurance provides a death benefit to your beneficiaries and can replace some of the income you were earning. This can help preserve any investments, savings, or other assets you intended on paying off.

Term Life Insurance Can Be An Asset:

Term life insurance is a policy that provides coverage to the insured over a certain length of time. This makes this policy an asset to your overall financial portfolio. One key advantage of level term life insurance is that the monthly premiums remain level for the life of the policy (whether it be 5, 10, 15, 20, 25, or 30 years).

However, you may opt for "yearly" renewable term life insurance which has a lower initial premium. With this option the premium rises each year. Be advised that yearly renewable term life insurance is only cost effective for a few years because of the increasing premiums. Before you invest in term life insurance you need to decide if you are looking for a solution that runs more than a few years. A level term life insurance policy can cost less depending upon the number of years you'll require coverage.

Several Good Reasons For Investing In Term Life Insurance:

For starters, term life insurance will cost less than permanent insurance. A potential buyer may have several dependents at home and he/she has to protect his/her income. They may have bought a house and now have a 30 year mortgage for $300,000. In this scenario you can plainly see a good reason to purchase a level term life insurance policy for $300,000 30 year term to cover their mortgage. If something were to happen to the proposed insured between now or anytime over the next 30 years the insurance company would write a check for the full face amount of the term life insurance policy for the survivor. This would allow the survivor to pay off the mortgage and the balance would be paid to the designated beneficiary.

Term Life Insurance Conversion Option:

One nice thing about term life insurance is you can consider conversion options, such as a convertible option. A convertible term life insurance policy means that during a specified time you can convert all or part of the term insurance to a permanent life insurance product. If you chose3 this option you wouldn't have to prove evidence of insurability since you were already insured. For instance, if you take out a term life insurance policy your need for the amount of coverage may change down the road. You may still need some life insurance but can afford to lower the face amount of the policy, thereby lowering your premiums when you exercise a conversion option. The conversion option on a term life insurance policy simply gives you the option to convert over a certain amount to cover final expenses.

The attraction to term life insurance is that it can be bought at an extremely low price and can be very beneficial to young families. If you lock in a term rate at an early age while you are young and healthy the rate is guaranteed for the full length of time on a guaranteed level term.

It is also possible to combine term life insurance with a permanent life insurance policy. During the earlier years of the policy you'll have more coverage. As you get older there's a good chance you may not need as much insurance as you originally applied for. For example, the children may have grown up and the house is paid off. So the need for so much coverage is not there and the term insurance will expire. The client will still have the permanent insurance policy that was put in force at the same time the term insurance was issued. Now the client can use the permanent life insurance to pay off final expenses down the road.

Reasons Why You Might Need Life Insurance:

1. You can protect your family’s home and eliminate your mortgage.

2. Standard of living can be maintained.

3. Give you spouse a retirement income.

4. Provide income to pay off any outstanding debt you may have incurred.

5. Save the family business.

Term Life Insurance Policies:

1. Term policies can meet a wide variety of personal and business needs and are a practical way to receive the most coverage for your dollar amount.

2. You can purchase for a certain period of time (10,15,20,25,30 years) and during this time-frame your term insurance policy will provide protection and pay a death benefit to your beneficiary if anything happens to you.

3. Many term life insurance policies allow you to convert your policy to a permanent policy within a specific time period.

Article Source: http://www.uberarticles.com/articles

Term Life Insurance article submitted by Roger Kelley. Reliable coverage. Receive a FREE no-obligation quote at at Term Life Insurance Click here for other unique term life insurance articles.