Introduction to Term Life Insurance

Insurance is one of the most powerful tools anyone can utilize that will guarantee a secure and stable financial future.  Yet it is one of the most under-utilized vehicles that’s used to create financial security. There are many reasons why the topic of insurance is not “mainstream” but that is a discussion for another day. As an introductory article, we will look at Term Life Insurance and its uses. How Term Insurance can assist most individuals, families, and groups as a financial asset.

TERM LIFE INSURANCE

 Term life policies can be used as a form of mortgage protection. Yes, you heard that right. Banks does not offer you mortgage protection, insurance policies do. If you have a 20-year mortgage you can get a 20-year term policy that gives you protection.

 

Basic Life Insurance is Term

Term policies offer you coverage while you are still young having kids or whiles saving for college. The basic definition of term life insurance is that it is a contract between the policyowner and an insurance company. Term insurance is the most basic form of life insurance coverage.The range is anywhere from 10 to 35 years, some companies even offer 40-year term.

Term Length

Term life insurance is not for everyone though and like everything else has some cons. As mentioned before, it is just for a specified period. Term life insurance policies also do not have cash value built in like whole life or permanent policies. The premiums, though relatively low, will likely increase at the end of the policy term, mainly because of the age factor, the older one becomes, the higher the premium payments.

Advantages of Term Life Insurance

For the advantages of term life policies, let us begin where we left off with the cons. Term life offers lower premiums, at least at the beginning of the policy period. It is an awesome vehicle for those who may need temporary coverage and the benefit for the beneficiaries is the tax-free money they will receive if the insured dies within the term.

Converting a Term to a Permanent

Also, those wishing to continue insurance for their entire life, may in most cases convert temporary policies to permanent policies. How can a term policy be converted to a permanent policy? Through the use of what’s called a rider, (which will be discussed in another article) which can be used to offset higher premiums costs and even guarantee renewed insurance when term policies expire.

Rider

A rider is simply an option where one can have more flexibility in their policy because of the unpredictable nature of life, a lot of people add riders to term policies at an additional cost.

Conclusion

So, there you have it, a primer on what term life policies can do and should do as part of your financial arsenal. A lot of people are now realizing the benefits of Cash value policies over banks’ accounts. You get what you pay for most of the time, so just make sure to do your due diligence before, feel free to contact us here at Wealth Financial Services & Products at 754-202-2300 or visit our Get a Quote, email us at info@wealthfinancialservice.com and we will be happy to start a conversation on how we can best serve your needs.