– By Philip J Reed, on behalf of Intelliquote
Buying a life insurance policy can feel like a major risk. Life insurance possesses an obvious benefit of taking care of a spouse or children after a person dies. The main hurdle is many life insurance policies can require a huge financial investment with expensive monthly premiums.
One option that can reduce the financial sting from investing in life insurance is taking out a term life insurance plan. This can often be a much more affordable method of obtaining life insurance than simply opting for a permanent life insurance policy.
There are five things you may not have know about term life insurance, which might make it an appealing (and appropriate) option for you.
1. Term Life Insurance is Flexible.
A term life insurance policy allows for flexibility. The monthly premium you pay is based entirely on the term of the plan and the amount of coverage you select. Term lengths can be 10, 20 or 30 years and insurance coverage can range anywhere from $100,000 to several million dollars. In other words, term life insurance policies are not only designed to be flexible, but that flexibility ensures that you’re both getting all of the coverage you need, and that you’re not paying for additional coverage that you don’t.
2. Term Life Insurance Requires No Savings Account.
On the whole, term life insurance costs you less than permanent life insurance, and this is partially due to the fact that there is no requirement to invest in a savings account set up by your insurance company. You only pay the monthly premiums, and that means your monthly payments are less. If you buy a term policy, you can choose to invest the money you save, and that may actually be a wise decision; using sound investment strategies can easily generate more savings than buying a whole life insurance policy.
3. Term Life Insurance Can Cover Your Short Term Needs as Well.
Term policies are a good contingency plan to help cover things such as a mortgage, or your child’s college education expenses. A term plan can be purchased to match the length of that mortgage, or to cover the period of time your child spends getting their college degree. When people think about life insurance, they usually think about the far future. With term life insurance, they can also think about the issues they face here and now, and see that those are accounted for as well.
4. Term Life Insurance Has a Low Monthly Rate.
With term life insurance, there is never fear of scraping together enough money to pay a high insurance premium on top of other monthly bills. Term insurance plans are affordable and the monthly premiums are fixed at a lower price. For example, if you are in your mid-30s and in good health, you can take out a 10 year $100,000 policy that will cost you less than $10 per month. That’s about the price of a single inexpensive dinner, half the price of a new CD, and about a fifth of the price of a video game. Thinking about it that way, that’s not much to pay for peace of mind.
5. Term Life Insurance Includes an Option for Renewal.
Perhaps most appealing to many people, term life insurance policies can often be renewed beyond the length of the original plan. They also include an option to convert to whole life insurance if you decide you want that type of coverage. Certain conditions may apply, depending upon the specific plan you choose (and the specific agency you choose to go with, so make sure to do your research!) but the fact remains that the plan you choose today can be the same plan you carry with you for the rest of your life, and that’s not a claim that whole life insurance can make.
When it comes to life insurance, you will need to make the right decision for yourself, and for your family. We hope that this article has given you a better understanding of what term life insurance can offer you, but, ultimately, it will up to you to decide what best suits your needs.