Term life insurance is often also referred to as pure life insurance. It is insurance that guarantees the payment of a previously stated death benefit during a specified term. When that term expires, the policyholder will need to renew the policy to include another term or take the policy and convert it into permanent coverage.
Reasons to Purchase Term Life Insurance
Life insurance helps replace your income after you pass, so your family does not fall under financial strain and hardship.
With the right term life insurance policy in place, your spouse would receive enough money from the policy to pay off or keep up with a home mortgage, for example. It can also help pay for funeral expenses.
Compared to other insurance policies, term life insurance is a more affordable insurance type and is one of the more popular choices.
Key Points to Remember
Before choosing term life insurance, there are a few key points to keep in mind. First, you cannot change the coverage amount within your term policy even after you realize what you have purchased is not enough. To remedy this, you would have to purchase an additional policy to be given that additional coverage. The rates for life insurance policies are also dependent on life expectancy. This is why you will find much higher rates for life insurance the older you get.
If you outlive the policy term, then the insurance will terminate your policy, and you will need to purchase a new policy if you want to continue to have life insurance. When doing this, you may also find that the premiums for the new policy may be quite costly as you continue to age.
Term Life Insurance Coverage
So, what does this kind of policy cover? Typically, these policies cover funeral expenses, any outstanding debt, and can replace lost income. The death benefits can be used by the beneficiary in any way they see fit.
Term life insurance is a good choice if you are looking for lower monthly premiums, you want a much shorter commitment, you don’t care about building cash value, and you want a higher amount of coverage.
Choosing Your Policy
When deciding which policy to purchase, you need to conduct a review of your finances including all financial needs and the needs of your dependents. Also, consider any significant debts you have as well that will need to be paid off.
Make sure to read the policy beforehand to make sure that it provides you with an appropriate amount of coverage that meets your needs. This should be analyzed on an annual basis, because your needs may change as time goes on.
It is also a good idea to shop around for multiple quotes before deciding on one to make sure you are getting the best possible coverage for the most affordable amount. Quotes will vary greatly between insurance companies, so be sure to do your research.
Finally, it never hurts to get the help of experienced agents to help walk you through your different life insurance options to ensure you get the policy that best fits your needs. Contact Mission & Vision today for more information and to get assistance along your life insurance journey.