Article Directory :: Finance & Investment Articles

Understanding Simple Term Life Insurance

By Marilyn Katz

Republish: EasyPublish™ Published: 30Aug2011 Word count: 581 Viewed: 198 time(s) Get Free Content For Your Site

Many people who shop for life insurance notice one thing very quickly! The realize that term rates are lower than the rates for whole or universal life insurance. Of course, US consumers are pretty smart. They want to be sure they are getting good value for their money, and they are not just interested in the cheapest rates. Take a moment to understand term life insurance!

First, take a moment to undersatnd why term costs less. If you do get any sort of offline or online insurance quotes, you will want to know what you are shopping for! That way, you can be sure of getting good value for your money.

The word "term" means that the policy contract will last for a length of time. That time period could be fairly short or fairly long. You can find policies with six month terms, and you can find policies with 30 year terms. But no matter what term you choose, the policy is considered termporary. It does have an end date.

What happens after a term policy expires? In the most basic form, a term policy will have no value left after it has expired. There are some additional riders you may choose to add which can affect that, but this fact is one reason why term policies cost less than universal or whole life policies do. When you buy whole or universal life, the policies cover you as long as they are kept in force. That is not true with temporary insurance.

Why do people buy term? SInce these policies do expire with no value, what are the advantages to buying them? I already mentioned that they are cheaper. You are only paying for coverage, and you are not paying for the policy to build up a cash value. The lower price means that you may be able to afford a lot more coverage. So people buy term to get more coverage at a lower price.

A lot of our needs are temporary anyway.Consider this example. If you need a lot of life insurance to cover your home mortgage, you may not need that much coverage after you have your mortgage paid off. It makes sense to buy affordable coverage now, while you have a large need for life insurance. Later, when you needs have gone down, you may decide to cover yourself for a much lower amount.

If you want to cover your bases, you may choose to purchase a policy that has an option to covert to whole life later. This way, you can get cheaper term life now, but still have the option to switch to a permanent policy later. Another rider you may want to consider is called return of premium (ROP). It actually returns your premiums if you do not have to make a claim on your term policy. Most of this article just descriibes a very basic policy, but there are options that can make your coverage more flexible and powerful.

How can you find a term life policy? You can find many good insurance agents in your local area. If you would like to narrow down your search, you may try to use online life insurance quote forms too. There is not one best company, and there is not one best way to do things. Shop for insurance the way you like!

EasyPublish™ this article - publishers click here

More articles by Marilyn Katz

Free Report!
Ten Essential Secrets Of Article Marketing ... Grab Your Free
Copy Now:

Need Content?
Regular Top Quality Content for your Blog, Ezine or Website ...
Delivered Direct,
For Free!
Click For Details