Many people believe they don’t need life insurance because they’re young and healthy. But this couldn’t be farther from the truth. Even if you are in perfect health, you should still get life insurance. Here’s why…
When it comes to your personal finances, there are three major areas you should pay close attention to…
People who purchase term life insurance can receive a benefit for ten, twenty or thirty years.
In today’s market, more and more people are learning about the importance of term life insurance. But, not everyone understands why this type of coverage is so important to your financial planning.
What is term life insurance?
Term life insurance is a type of life insurance policy that only lasts for a set period of time. The most common term is 10 years. However, you can get a policy with any term you choose. For example, you might select a five-year or 20-year term if you expect you will live longer than those amounts of time.
Why should you consider this type of life insurance? It’s a good question. After all, health problems are the main reason people need life insurance. But, as you know, modern medicine is remarkably effective at extending human life. So, if you are in excellent health and you still want to be sure your family will be financially secure when you are no longer around, then term life insurance might be an option for you.
After that, your coverage ends. However, with traditional life insurance, you are paying for coverage for the rest of your life, even if you are not working or making payments. Traditional life insurance often has much higher premiums than term life, because of that extra expense. But, what happens if you need the money the insurance company has paid out? That’s where traditional life insurance can get very expensive indeed. For example, let’s say a 65-year-old man buys a $500,000 policy of traditional life insurance. Let’s say he pays a $600 annual premium and the insurance company pays out $500,000 when he needs it (because he died). The problem is, he will still be required to pay the remaining $100,000 in premiums every year for the next 19 years. This could easily cost him $950,000 or more! And, if he remarries before then, he will have to pay another $500,000 in additional premiums. The result is, he could end up spending thousands and even tens of thousands of dollars on this coverage, which was meant to provide security for his family… but ended up providing a large financial burden for them instead! This is one of the many reasons so many people are learning about the importance of term life insurance… which
Term life insurance premiums are significantly lower than those of permanent (or "level-premium") policies. But, many people don't know that... the benefits of a term policy are actually greater than those of a level-premium policy. That's because with term life
1. Why Term Life Insurance Is An Important Part of Your Financial Planning
Term life insurance is a way to protect your family from catastrophic financial circumstances. It is designed to be a replacement of income if you become unable to work. It can provide coverage for a long time, but the benefits won't start until you become too ill or disabled to work. Term life insurance provides your family with protection when you are still working and earning.
2. What is Term Life Insurance?
Term life insurance is simple: you pay a small amount of money every month (usually around $10 or less) for as long as you want the insurance. Then, when you need it, you can make a very small payment (often only a couple of dollars) to end your policy. When your term expires, your policy will automatically continue for another year unless you decide to cancel it. This type of insurance is often a good choice if you don’t know what your future holds or you just don’t feel like you have enough time to prepare for the “what if” scenario that might cause you to have a major financial need.
The purpose of term life insurance is to provide a financial safety net for your loved ones if you should die prematurely. Unlike permanent life insurance, term life insurance will expire if you survive the term specified on the policy. This means that if you are diagnosed with a terminal illness, the policy will expire and your beneficiary will receive the death benefit immediately.
3. How Can I Protect My Family with Term Life Insurance?
If you can’t afford life insurance, you should still protect your family in case of death. A term life insurance policy allows you to pay a monthly premium for a period of years, which means you don’t have to pay any premium after a specific amount of time. However, if you choose to renew your term policy, you’ll have to continue paying the premium. The cost of a term life insurance policy will vary depending on several factors, such as your age, gender, and current health.
Term life insurance can be one of the most important tools in your financial security plan. It’s affordable, flexible, and easy to use. But like many things in life, it comes with a few caveats. If you’re thinking about purchasing term life insurance for your family, here are some ways you can protect them:
It’s hard to imagine what we'd do if we lost a loved one and there was no insurance in place to cover their bills. If you or a family member is currently considering term life insurance, it can be difficult to understand the process and figure out how to get the best policy. Term life insurance is different from permanent insurance policies because it only covers you during the policy term.
4. Types of Term Life Insurance
Term life insurance is designed to provide protection against the loss of income from death or disability. With this type of coverage, you pay a fixed amount every month for a certain length of time, which can range from three months to as long as 20 years. This type of coverage is often very inexpensive compared to permanent life insurance. However, there are some important things you should know about term life insurance.
- The first thing to understand about term life insurance is that there are two types. One type is known as “whole life term 100” and the other is “term 10/20 or 30”. Whole life Term 100 is expensive. It has a very high level of protection, and will remain in force until the insured person pass away or live until 100 years old.
- Term insurance, on the other hand, is much cheaper. It only lasts for a term of years and it has much lower levels of protection. This type of life insurance is often preferred by people who are younger than 55 because it has a very low premium. However, there are three important differences between whole life and term life:
5. Types of Term Life Insurance That Are Not Recommended
Post-Claims underwriting term life insurance. There are term life policy that do not perform health check and underwriting process until the time of claim. After the policyholder has already filed a claim, the insurance company will then scrutinize his file to see if he fits into any of their “red flags” which means he's much more likely to get turned down for coverage in the future. This type of underwriting is often unfair and totally inaccurate. There are several things you should know about this type of insurance,
It is not cheap.
You can never get a refund if you decide to cancel your policy
The insurance company can raise your rates without giving you any warning at all, and
If you become seriously ill or injured before renewal at end of term, you could be left with no insurance whatsoever. The bottom-line is that this type of term life insurance is not recommended.
Always go for term life insurance with proper underwriting process. If you are deemed very healthy after the underwriting process, insurance company may offer a preferred rate of Term life insurance compare with post-claim. This is the cheapest type of life insurance coverage. The policy covers your life for a pre-determined period of time, and there are no requirements for medical exams or proof of insurability on renewal if you decide to continue on the set determine period.
6. How Much Life Insurance Do I Need?
Life insurance is one of the most important forms of protection that most people don’t really think about. But just how much insurance do you need? This is a great question to ask yourself and your family. The more of a financial burden the event would cause if it occurred, the more insurance you should purchase. However, the answer will also depend on the value of the life insurance, and the likelihood of your passing away within the next 10-15 years.
How much life insurance do you need? It depends on what your needs are, but there’s a general rule to follow. The rule says that the amount of life insurance you need should be equal to the current value of your estate multiplied by the expected duration of your life.
7. Term Life Insurance Questions to Ask Your Insurance Agent
To determine whether you will be a good candidate for term life insurance, you will need to have your health, finances, and other key aspects of your personal and professional life checked. The most important question to ask when buying term life insurance is: What happens if I die during the term of this policy? If the policy owner dies before the policy expires, the insurance company will pay out the death benefit to the beneficiaries listed on the contract.
In conclusion, the most important thing you can do for your family is build a legacy for them, one that will last forever. That means creating a secure financial future for your children and their children. Term life insurance is a critical component of this financial strategy. Read on to learn why.