Temporary insurance, more frequently known as term, has two
main features: the amount of the death benefit and the price of the policy.
In
other words, Term insurance is a life insurance contract that provides
protection for a limited number of years. The contract is quite simple: When
you die, the insurance company pays. The death benefit is only payable if death
occurs during the agreed-upon term.
Level Term Life Insurance is often used for family
protection purposes by providing life insurance cover in the event of the death
of the life or lives assured for the benefit of the surviving spouse and, if
there are any, the dependant children.
Term insurance gets its name from the fact that it covers
you for a specific term, or period of time.
The amount of Level Term Life Insurance remains level for a
specific term i.e 25 years and is arranged normally on a sole life or joint
life first death basis with the premium often remaining constant throughout the
term.
If the life assured outlives the term then the Level Term
Life Insurance policy normally finishes and the life policy pays out nothing. This
is one of the reasons for why Level Term Life Insurance is normally cheaper
than say a Whole of Life policy.
Level Term Life Insurance is also used to cover personal and
business liabilities such as overdrafts.
Term life insurance policy is a form of protection for a
specific period of time. It can be 5, 10, 15 or 20 years. The insurance policy
expires at the end of the term period with no accrued cash and there are no payable
benefits.
If the policy owner dies during the term period then only the
death benefit is payable. Some people define a term life insurance policy as "insurance that is actuarially designed to expire before you do".
There are many types of term insurance policies. Let us look
at the need and which policy to apply to that need.
Your Mortgage
If you have a mortgage on your house, you need insurance.
You need a homeowners policy that would provide sufficient cash to repair or
rebuild your home in the event of destruction by fire, flood, a hurricane, or
any other natural disaster.
As you will have that mortgage for a specific period of time
that can be categorized as a temporary need. Most people buy decreasing term
life insurance to fulfill this need.
Paying Off A Loan
Suppose you buy a new car. You put down a small down payment
and you will pay this off in about 5 years. If you suddenly died that money is
still owed to the bank and they will likely come and repossess that car.
If it is your desire that a relative or friend should own
that car and you include that in your "last will and testament" it
would make sense to buy a 5 year term insurance policy in the amount owed on
the car.
Upon your death, the amount owed will be paid off. If there
is any money over and above, the amount owed coming from the policy your
beneficiary will receive the balance.
Protecting A Young Family
One of the most devastating experiences a young family can
go through is the death of the breadwinner. You are in your mid twenties and
married. Your wife is about the same age and you have two children ages 3 and
1.
Although your wife graduated college, you both came to the decision that she
would stay at home for a while and look after the children. Through the
carelessness of a drunk driver, you are killed in an automobile accident...
Following are the 7
tips for finding the right term life insurance policy and company:
- If you
keep a record of the standard health questions, the process of getting
your online quote can be further simplified, which insurance companies
ask, about your health, namely weight, cholesterol level, blood pressure,
and family medical history. Give accurate answers to these questions.
- Understating
your rights and responsibilities fully as a policy owner is important for
you before signing up. If you need further clarification on any aspect of
your policy, have an agent explain the details to you.
- You
will be able to get the best policy that suits your circumstances and your
family's needs, if you spend the necessary time shopping and comparing
term life insurance policies.
- Online
internet access and the tools provided on the insurance companies'
websites, you are now able to get the best deal for your policy's
premiums.
- In
most situations, unless you think you may want a cash-value policy in the
future, a term life insurance policy is the best choice.
Most term
policies are essentially the same, and you can go with the lowest priced
term policy. With term policies, you do not have to worry about claims
disputes like you do with other types of insurance.
- Just similar
to any other type of insurance, it is very essential that you take the
time to research, educate yourself, and shop around for a policy that will
best suit your financial circumstances and needs.
There will be variation in prices on term life insurance across insurance
companies, and there is no single company, which can offer the deal for
every customer.
This is the reason why it is important for you to shop
around and compare so that you can decide which company is offering you
the best rate for your life insurance policy.
- Hundreds
of websites are available to make your online shopping for insurance
policy easy and quick. You can get your quotes within five to ten minutes using
the simple and straightforward forms, which insurance companies provide
online.
Online Internet access allows you the convenience to do your
research and shop around, and take time to make your own decision under no
pressure.
Other Resources
Term Life Insurance Quotes - Compare Term Life Insurance rates among America's most trusted insurers. Fast. Easy. Secure.
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