Term Life Insurance. What terms best suits you?
We know the kids jump on the couch when all you want to do is rest for just fifteen minutes. And your lovely wife always seems to need the garbage taken out at the worst possible moment, like with two minute left in the fourth quarter of the season’s biggest game. They are your family and you love them dearly, so wouldn’t you want to protect them when you are no longer around? Well, life insurance can be your best guardian when you’re gone, especially term life insurance.
What is term life insurance? Term life insurance, also called term assurance is a limited time coverage, which provides an economic pay out to the designated beneficiary of the deceased. Term life insurance is relatively inexpensive compared to others. Even at its peak it remains much lower than other whole life policies. So, if at the age of 35 a healthy male takes out a policy at $500.00 annually with the premium rising gradually over the years he’ll probably receive about $15,000.00 at years end when he hits the age of 75. This original life insurance policy is a pure death benefit and best serves to pay off funerals, college tuition, mortgages and other needs of the insured’s dependant.
One type of term life insurance is annual renewal term; this is less complex than other policies. Annual term insurance or ART is a yearly policy. This policy is paid out to the deceased’s family if and only if the insurer passes on within the year the policy was taken out for. So, if a person took the policy out on November 12, 2008, the policy only pays out if the deceased dies before November 12, 2009, not a day after. The premium paid here is generally based on the likely hood that the client would pass on in that year’s period.
A physical is usually needed to prove that the client is insurable. One of the down falls of this policy is in the event of a terminal illness. In this case if the insured does not pass on during his/her renewal time the policy will NOT pay out. To ward against these circumstances some policies may have what is referred to as a guaranteed reinsurability. Here if the insured does not pass on during the term they could renew without a physical examination before renewal.
Also a very common form of term life insurance is level term life insurance. This is where the premium is the same for the selected years, usually 10, 15, 20 or 30 years. The insured would pay the same premium each year for the selected term. The longer the premium level runs for, the higher the premium. Generally the most popular term is 10 years.
In closing these policies are easier on the pocket than whole life or variable funds and are definitely worth it for your peace of mind and your family’s protection.