Why Term Life Insurance May Be Your Best Option

27 August 2014 | Uncategorized | Tags: , , ,
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Life insurance comes in two common varieties: whole life (also known as permanent) or term life. Both options have upsides and drawbacks, and each one serves a purpose based on different needs. So when you’re shopping for life insurance, keep in mind the best coverage is one that provides you with the reassurance you want for your family—at a premium you can afford.

 

The Basics

 

Term life insurance provides coverage for a certain period of time or until you reach a specific age. If you pass away during the term of coverage, your beneficiary receives the value of your policy. At the end of the coverage period (or term), your policy expires.

 

Whole life insurance covers you for your entire life and rates usually stay consistent as you age. Some whole life policies build cash value that you can borrow against while living.

 

3 Reasons Why Purchasing Term Life Insurance May Benefit You:

 

Simplicity

 

Term life insurance is a relatively straightforward product. The idea is that you pay a premium in exchange for a specific coverage amount that will go to your beneficiary upon your passing.

 

Some types of policies require a medical exam and blood work as part of the underwriting process, but many insurance companies offer term coverage without a medical exam. These policies are known as “no medical exam life insurance.” This type of coverage is widely available with an easy application that requires only basic health information.

 

Affordable costs

 

For many people, a compelling reason to buy term life insurance is coverage rates are typically initially lower than whole life insurance rates. You may find that term life insurance offers you the best level of financial protection for the price depending on your needs.

 

When you purchase term life insurance, your monthly premium is usually based on factors such as age, gender and, in some cases, a medical history at the time you begin coverage. As you age, generally the cost of coverage increases, usually in five year increments.

 

Guaranteed exchange options

 

Some insurance companies allow policy holders to upgrade or exchange a term policy for a whole life policy at any time during the term coverage period. This means that any time during the term, you can convert to a whole life insurance policy for coverage that will last your entire life.

 

Choosing a guaranteed conversion or exchange offer usually means you can forgo a medical exam or application process. To find out if this option is favorable to your specific situation, do some research online or speak with an insurance agent.

 

To find out if term life insurance is the best option for you, consider your family’s future needs and what you can afford now. This will give you a starting point to determine if term life insurance may fit your lifestyle and meet your goals.

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