Two main types of life assurance are permanent and term. There are many policies available within these two main categories. Knowing what is right will help you create a strong life insurance policy.
If you don't know what you want, a simplified issue might be the right fit.
Because term life covers only a specific period and is generally less expensive than permanent life insurance, it's an excellent choice for young families looking for temporary coverage. For example, you can buy a policy to cover the years your family relies on you financially and lower your coverage when your children become self-sufficient-a policy.
Shopping for simplified-issue term life insurance should include the words "level term" and "guaranteed levels premiums" in your search. These phrases indicate that the term life insurance quotes received will reflect the total cost of the policy.
No matter what your age, it is important to evaluate your life insurance policies in light of your goals and the financial needs of your family.
Term life policies are available individually or as part of a group insurance plan through an employer, civic, religious, or other organization.
There are many options in terms of how long you want your term life insurance to last. You can generally buy coverage for one year, five, 10, 15, 20 or 25 years. Policies that last for one or two years can help pay short-term bills or cover expenses like tuition for children. A 30-year term is a better option if you're the breadwinner who needs a policy to pay your mortgage. These needs may change over time.
Term life insurance, also known as pure life insurance, guarantees payment of a stated death benefit if the covered person dies during a specified term. Once the term expires, the policyholder can either renew it for another time, convert the policy to permanent coverage, or allow the term life insurance policy to terminate.
According to the National Association of Insurance Commissioners, some term policies may also include a return of premium features. This means that you will get back any or all of your premiums if the death benefit doesn't pay out before the term ends. This is however a more costly option.
A 30 year term life insurance policy can be a great choice if you are part of a couple who are financially secure and able to handle the premium difference between a 20-year and a 30 year term.
Many term life insurance policies offer a conversion option, putting you in control. This allows you to switch to a permanent life insurance policy before the term expires, usually without requiring a medical exam.