What Term Life Insurance Is and How It Works
Karen E. Peyton??
“You've always had the power my dear, you just had to learn it for yourself.” ~ The Wizard of Oz ??
The simplest, purest form of life insurance is Term Life Insurance.
You pay a premium for a particular period of time, during which you pay a benefit to your family (or whom you select as beneficiary).
Who and what is Term Insurance good for?
The many benefits of having life insurance
A term life insurance policy is a contract between you and an insurance company. Your beneficiaries will receive a lump sum, known as a death benefit after you die in exchange for your premium payments. The money can be used by your beneficiaries for any purpose they choose. It is only valid during the term selected and approved for, which is between 10 and 30 years.
When will Term Life Insurance not pay the benefits?
A life insurance company can refuse to pay the death benefit if you lie on your application about risky hobbies, medical conditions, travel plans, or family health history.
What types of death are not covered by life insurance?
There are many types of Term Life Insurance:
Types of term insurance
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Information needed when considering the purchase of term life insurance?
When calculating how much life insurance you need, you should take several factors into account. A few of these factors are your age, overall health, life expectancy, income, debts, and assets.
How much life insurance do I need?
The easiest way to estimate your future earnings is to get 30X your income between the ages of 18 and 40; 20X income between 41 and 50; 15X income between 51 and 60; and 10X income between 61 and 65. After 65, coverage is based on net worth rather than income. Here's a more detailed explanation of the philosophy behind this method and other factors to consider.
For an insured, what is the value of term insurance?
Term life insurance is typically less expensive than permanent whole life insurance. However, unlike permanent life insurance, term life policies do not have cash values, no payout after the term expires, and no other value. Your heirs will receive the benefit if you die during the policy's term. It provides peace of mind for the insured.
What are the pros and cons of term insurance?
Pros:
Cons
Many individuals and families find term life insurance to be an excellent option, but it isn't right for everyone. Decide if term life insurance is right for you by weighing the pros and cons.
There is a difference between term and whole life insurance. Term insurance covers you for a set number of years, while whole life insurance covers you until you die. If you cancel your whole life policy before you die, the cash value can also be surrendered for that amount. As whole life insurance is more expensive, term life may be a better option if you are looking for a low-cost policy. Every individual's life circumstances will determine the best option.
The next article will be on universal life insurance, Pros, and Cons.