Term Life Insurance Wordology

By: Roger Kelley

Life insurance provides a death benefit to your beneficiaries and can replace some of the income you were earning. Therefore, an important part of a sound financial plan is aqequate life insurance. Adequate meaning that it will provide enough money that your family can continue living the same standard of life that you've worked so hard to provide for them while you're alive. For example, this can help preserve any investments, savings, or other assets you intended on paying off.

Term Life Insurance Can Be An Asset:

Term life insurance is a policy that provides coverage to the insured over a certain length of time. One key characteristic of level term life insurance is that the premiums remain level for the life of the policy (whether it be 5, 10, 15, 20, 25, or 30 years).

However, you may opt for "yearly" renewable term life insurance which has a lower initial premium. With this option the premium rises each year. Be advised that yearly renewable term life insurance is only cost effective for a few years because of the increasing premiums. Before you invest in term life insurance you need to decide if you are looking for a solution that runs more than a few years. A level term life insurance policy can cost less depending upon the number of years you'll require coverage.

Buying Term Life Insurance Can Be A Good Decision:

Term life insurance cost less than permanent insurance. A potential buyer may have young children at home and he/she has to protect his/her income. They may have bought a house and now have a 30 year mortgage for $500,000. Hence, they would need to purchase a level term life insurance policy for $500,000 30 year term to cover their mortgage. If something were to happen to the proposed insured between now and the next 30 years the insurance company would write a check for the full face amount of the term life insurance- policy for the survivor to pay off the mortgage and the balance would be paid to the designated beneficiary.

Conversion Option:

You can convert all or part of the term insurance to a permanent life insurance product without having to prove evidence of insurability. This type of "conversion" is called a convertible term life insurance policy and means that during a specified time the policy can be converted from term life to permanent insurance. For instance, if you took out a term life insurance policy the amount of coverage you need may change down the road. The need for some life insurance may still exist. The conversion option on a term life insurance policy gives you the option to convert over a certain amount of the policy to cover final expenses.

Term life insurance is very attractive to young families simply because it can be bought at an extremely low price. While you're young and enjoying a high expectation of good health you can lock in a term rate ... being young and healthy has its benefits and the cost of term life insurance is guaranteed for the full length of time on a guaranteed level term.

Some clients like to combine term life insurance with a permanent life insurance policy so during the earlier years of the policy they have more coverage. As they get older they may not need as much insurance as they originally applied for. For example, the children are grown and/or the house is paid off so the need for so much coverage is not there. The term insurance will expire but the client still has the permanent insurance that was put in force at the same time the term insurance was issued. Now the client still has the permanent life insurance to pay off final expense benefits down the road.

Reasons Why You Might Need Life Insurance:

1. Protect your family’s home by allowing them to pay off your mortgage.

2. Maintain your family’s standard of living.

3. Provide retirement income for you spouse.

4. Pay off outstanding debts you have incurred.

5. Save the family business.

Important Benefits Of Term Life Insurance Policies:

1. Term policies can meet a wide variety of personal and business needs and are a practical way to receive the most coverage for your dollar amount.

2. Term insurance provides protection for a certain period of time (10,15,20,25,30 years) and pays the death benefit to your beneficiary if anything were to happen to you during this time.

3. Term life insurance policies do not accumulate cash value but many allow you to convert your policy to a permanent policy within a specific time period.

Article Source: http://yourfinance.co.za

About The Author
Term Life Insurance article submitted by Roger Kelley. Make sure your family is provided for when you're not around at Term Life Insurance
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