Need low priced life insurance? Check out the budget friendly option of a term life insurance policy. Term life insurance policy premiums are usually much better low priced options for life insurance coverage than cash-value policies (universal and whole), specifically if you are young and in good health. An inexpensive term life insurance policy does exactly what you expect it to accomplish by financially caring for your beneficiaries if you die. Generally speaking, most Americans are under insured and carry permanent life insurance coverage which is a lot more expensive than term. This is a fundamental problem when the main bread winner dies. You will need to understand that permanent products pay a much higher premium, in the vicinity of 10-15x more. So in retrospect, a $1,000,000 term is essentially the same cost as a $150,000 permanent product. What can you feel better with?
Here’s the basic principles of a low priced term life insurance policy:
You typically purchase a low cost term life policy using a specified time period, usually one, five, ten, fifteen, twenty, twenty-five or thirty years. During that term you have to pay a specified premium. Some think about a return of premium (ROP) term which if you outlive the contract your are refunded all premiums paid in. Your beneficiaries will receive a death benefit in the event you die during the term from the life insurance policy.
Seems not so difficult, right? Well, as with all insurance, there are little complexities and loop-holes you need to fill.
What about when your term has ended? That’s where renewable and convertible term insurance is available in. For example, if you need a basic Ten year low cost term life insurance policy using the death help to stay exactly the same throughout the term life policy, and at the end of the term you would like to convert to an alternative term life insurance policy like a cash-value policy, if you don’t take another health check, your contract better have a conversion privilege. This is very important in case your health diminishes. If so you would choose a level term convertible life insurance coverage. Conversion is the central feature in the term life insurance contract.
Term life does not build cash-value or possess the tax benefits like universal or very existence, but it could be a great option for someone who would like life insurance, but can’t afford the higher premiums. If you look very close at a permanent product through the present worth of the premium stream verses the money value you’ll realize it may be more advantageous to get term and invest the main difference. It is apparent agents neglect to present the numbers in this fashion since the rate of return is extremely low and never guaranteed but projected.
