Term Life Insurance
Term Life Insurance is the simplest and easiest type of plan that provides coverage for a segmented period of time; usually either 10, 15, 20 or 30 years. Term Life Insurance provides a benefit which is predetermined if the policy holder dies within the stated time period. However, if the policy holder does not die within the stated period, a renewal policy must be purchased. It is important to note that an expired Term Life Insurance policy becomes essentially of no value.
Term Life Insurance usually serves its purpose best for the ordinary person looking to be covered in case of an accident. In the event of an accident, the contract’s maturity value will be given to the beneficiary. Individuals who have families that require protection and would like to benefit from tax advantages should consider cash value or permanent plans. Often insurance companies will try to incentive their costumers to purchase permanent plans because of the maintenance fees they accumulate over the years. People who are financially savvy may consider purchasing Term Life Insurance rather than Whole or Universal and invest the difference in cost into securities of their own.
To summarize, the three most important aspects of Term Life Insurance are: the premium, the maturity value and the term. The premium is the monthly installment the policy holder pays and in the case of an accident the maturity value is what is received by the beneficiary. The Term is the length of time the policy holder wishes to hold coverage which usually is between 5 and 30 years. While sorting through various quotes it is important to research prospective insurers rankings on sites like A.M. Best, Standard & Poor’s, Moody’s, and Fitch. These rankings are important because they provide insight into how secure your plan is so that your benefits are available when needed.
To conclude, it is crucial to first analyze your life insurance needs then determine what type of plan best suits you. Again, if you are financially savvy it may be in your best interest to purchase Term Life Insurance and invest the difference you would have paid for a permanent plan.