For Inexpensive Life Insurance Term Life May Be Best
If you’re considering purchasing life insurance, term life may be worth thinking about. A term life policy has its pros and cons, but if you’re just starting a family, or have a family with small children and the premium payments on a straight life policy don’t fit your budget, consider taking out a term life policy. It’s important though to have a good understanding of both the advantages and the disadvantages that go with a term life policy. Sometimes, when we purchase an insurance policy, for any kind of insurance, we don’t give the policy a second thought, except when the periodic reminders come telling us it’s time to make a payment on the premium. We just assume the benefits will be there when we need them, and that’s that.
Straight Life – With a straight life or whole life policy, the premium payments remain constant over the life of the policy, and the life of the policy is equal to that of the policyholder. When the policyholder dies, the full benefits are paid to the policy’s beneficiary. The beneficiary is more often than not the spouse of the deceased, but could be anyone the policyholder chooses to name. Some straight life policies accumulate a cash value, which can be taken advantage of if cash is needed for an emergency, or if the policyholder no longer feels a need for life insurance. Once a straight line policy is purchased, it cannot be canceled, except for non-payment on the premium.
Term Life – For many who consider the different types of life insurance, term life is the most attractive option. One of the main advantages that a term life policy brings to the table lies in, as previously noted, the cost of the premiums, which are usually significantly less expensive than those one pays for a straight life policy, at least initially. Term life can be a good choice for someone desiring adequate coverage at a lower cost.
Why doesn’t everyone purchase term life insurance then? The answer is, most people outlive the policy. A term life policy terminates when the policyholder reaches his or her 65th birthday. The policy goes away, the payments on the premium cease, and the benefits vanish. You get what you paid for, insurance protection until you reach 65. Insurers will generally not insure someone for life insurance if they are over the age of 65. With less likelihood the policy holder has dependents like small children to worry about, this suits most customers.
The other disadvantage to a term life policy is that it does not have a cash value provision. The policy does not have a cash value at anytime while it is in effect, nor does it have a cash value when it terminates.
We will be happy to provide additional information and advice to help you in deciding between straight life insurance, term life insurance or another type of policy. Our advice and our quotes are free and there is no obligation on your part to make a purchase.