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What is term life insurance?

Term Life InsuranceTerm life is a life insurance policy that is purchased for a specified period of time, called a term. This term can last from 5 to 30 years depending on your age. There are two main types of life insurance policies, term life insurance and permanent life insurance.

The focus of this article will be term life insurance, and the various pros and cons of term life insurance vs permanent life insurance, term life insurance vs whole life insurance, etc.

No matter what type of life insurance policy you are looking for you can find quotes for it by just entering your zip code in above. Start comparing free insurance quotes today!

The Benefits of Term Life Insurance

There are actually quite a lot of benefits to purchasing term life insurance. The first being you can purchase a whole lot of insurance for a fairly low premium. For example, a 40 year old man who doesn’t smoke can purchase a $500,000 policy for about $27 a month. For a whole life policy this same person could expect to pay about $120 a month in premiums. As you can see, that is a big difference.

Another benefit to purchasing term life insurance is that some companies won’t require a physical to purchase the insurance unless it exceeds the $200,000 mark. If you are overweight or have a high risk job, your premiums aren’t going to be much different than someone who is in good shape and has a low risk job. There will be some variance, but not as much as with a whole life policy.

You can also get a lot of insurance for short periods of time. This is an excellent benefit for people with children. To ensure that your family is provided for if you were to die at a younger age you can purchase a million dollar policy for 10 years or 20 years, etc. If you decide to purchase insurance when your children are older, you can choose a 5 year option for insurance to ensure that they are all cared for.

If you can’t afford whole life insurance right now, term life is a great alternative. If you want to have life insurance but you can’t afford the larger premiums that a whole life policy brings, then you can get a great policy until you can. However, there are also some downsides to the term life insurance option.

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The Downsides to Term Life Insurance

One major downside to term life is that you can’t purchase it indefinitely. Term life is insurance for the young or at least the relatively young. Once you reach 55 many companies will not sell you term life insurance. Some stop at 65 and some will even go as long as 70 or 80. The key is proving you are in good health; as far as the insurance company is concerned the idea is to not pay out a claim. Insurance companies that do provide term insurance for older individuals charge outrageous prices, much higher than whole life would be over time.

Another downside is that term life is not an investment like whole life insurance is. When you purchase term life and the policy expires, then you are done and you don’t get any money. With a whole life policy, however, you can borrow against the policy after a certain amount of time. In addition, if after 20 years you need to cancel the policy, the insurance company may owe you money (depending on the terms of your policy).

Your Term Life Insurance Options

You have three options for term life insurance; they are Level, Decreasing and Renewable life insurance. Level term life insurance means that the amount of term life that you purchase doesn’t change over time and neither do your premiums. Decreasing term life insurance means that the benefit decreases over time as do your premiums. Renewable life insurance is a rider on your policy that allows you to renew when the policy expires without having to provide proof of health.

A renewable policy is more expensive than a non-renewable, but it is an excellent option for someone with a terminal illness who isn’t sure of what their life span will be. For families in this position, getting life insurance is next to impossible so this is an excellent way to ensure that your family gets the benefits that they need. Not all term life insurance policies are renewable; if you want this option you need to request it at the time of your insurance purchase.

If you want to know who has the best cost for term insurance, then you should use our free life insurance quote tool to get rates from multiple companies. Answer some questions about your life and your health and then get instant term life insurance quotes. Compare rates and options and choose the right one for you. Enter your zip code to start right now!

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