term life insurance
There are 5 different types (covering 2 main categories; term & permanent life insurance) of life insurance from which to choose from. Term Life is the only form of insurance that is not a permanent insurance policy, otherwise referred to as a "cash value policy." Term Life is the most common form of life insurance due mainly to the fact that it is the easiest and cheapest to be involved with. In this sense, it can viewed as a generic form of life insurance that doesn't offer too much flexibility by way of account management. The only function of a Term Life insurance policy is to pay a predetermined death benefit to a designated beneficiary following the death of the policyholder. Both the amount of the death benefit & the policy limit are the same. I.E, if you have a $200,000 policy, it's going to payout a death benefit of $200,000.
Term Life Insurance is synonymous with temporary life insurance. Due to the fact that a Term policy builds zero cash value, the premium is low when compared to the permanent policies offering a cash value account. A Term policy provides security and protection for your family following your death by providing a death benefit to replace the policyholders lost salary, and to cover any/all immediate expenses incurred by the policyholder's death. (I.E, funeral expenses, travel expenses, etc.) Due to the fact that Term policies are so inexpensive, they are generally recommended for young families whose financial responsibilities take precedence over an expensive, cash value account driven life insurance policy.
What are the benefits of a Term Life Insurance Policy?
- Cheapest available life insurance policy.
- Easiest life insurance policy to understand.
What are the 'cons' associated with Term Life?
- No cash value account means that policyholders can't take advantage of fluctuating interest rates.
- Premiums get more expensive with age due to the increased risk of death.
- For those 65 and older, the cost of a term life insurance policy can become expensive beyond the point of affordability.
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Compare Term life insurance with > LONG TERM CARE INSURANCE <
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