When it comes to life insurance, there are two main types that you can consider. Term life and permanent life insurance offer different conditions and benefits. Permanent policies like whole life or universal life are good for your entire lifetime and also offer cash value options. Term life insurance is less expensive than permanent life insurance, and it provides protection for a certain period of time without any opportunity for cash value. If you pass away within the term of your policy, your beneficiaries will receive a payout from the insurance company.
Term life insurance is a good option for those who only want coverage for a period of time or who want protection with cheaper premiums. No matter why you need a term life policy, there are many benefits that these insurance solutions offer. Let’s take a look at the benefits of a term life policy.
Lower Rates
One of the biggest benefits of term life insurance is that it is much cheaper than other permanent life insurance policies. This is because permanent life insurance covers you for your entire life, while term life insurance only covers you for a certain period of time. Whole life and other permanent policies also build a cash value over time and allow you some investment opportunity. As a result, permanent insurance is significantly more expensive. As an example, a 40-year-old woman in excellent health will pay around $33 per month for a term life policy with coverage of $500,000. The same women could pay around $520 a month for $500,000 worth of whole life coverage.
Considering the factors that impact insurance premiums, term life would also be the cheaper option if you have higher risk factors. Your life insurance policy rates will be based on things like your age, gender, medical history, and lifestyle choices. Based on your situation, you could have higher premiums. Additionally, if you are a tobacco user, you will experience higher premiums as a result of the associated health risks. With a permanent policy, your rates could be very significant as compared to a term policy.
Flexible Terms
Term life insurance policies come in many shapes and sizes. As discussed, term life is a temporary policy that offers coverage for a period of time. You can usually find a term life policy covering 10, 15, 20, 25, or 30 years. If you need life insurance for a specific period of time like until your children are grown, term life insurance is a good choice. It provides protection for a set number of years and then expires. Term life insurance is a good option if you don’t need life insurance for the rest of your life and don’t want to be locked into rates and premiums payments forever. It’s affordable and provides protection during the time when you need it most.
Coverage Amounts
The amount of coverage you need will depend on the circumstances of your specific situation. Many experts recommend buying a policy that has coverage worth six to 10 times that of your annual salary. Raising and educating children is expensive, however. If you have multiple children, you might need a higher life insurance amount to provide care and education for each child. Your situation and financial circumstances will dictate how much life insurance you need. You can find policies ranging from $5,000 to over $1 million in coverage with term life insurance. Term life policies are very flexible and offer coverage amounts for any needs.
While there are many benefits to having a term life policy, there are also a few things to keep in mind. When looking for policies, be sure to read the terms and conditions carefully, as each policy and each insurer may be different. Generally, you will want to make sure that you are aware of the policy’s expiration date and if there is a renewal option. In addition, be sure to keep your policy up-to-date with your current health and lifestyle. Let your insurer know if you have any changes in your health or situation. You can find the right term life policy for your needs with some consideration.
