Term Insurance

Term Life Insurance And You

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What is term insurance? This is one of the questions I get from time to time. People want to know how it works. What are the advantages to owning a term policy? What are the disadvantages?

• Young Married Couple

  You are recently married and still in your twenties. You have big plans for your spouse and yourself. You both recently graduated college and you plan to buy a home in the near future. You are not in a hurry to have children but you and your spouse plan to expand the family in the future.

  Your first consideration is to protect your spouse in case of your premature death. You want a policy that would guarantee that a good portion, if not all, of your income continues.

  When you buy a home you certainly don't want your other half to lose it if you died. A mortgage term life insurance policy would certainly take care of that,

  As you know you will have children you may as well get some term insurance now. A 25 year or 30 year term policy will probably be best. That should cover your loved ones up to and through the college years.

  The great advantage is that term life insurance is cheap insurance in any form. It is even cheaper for young people. The older you are the more it costs buy once you have it the premiums usually remain level.

• Middle Aged And More Mature People

  You are progressing in years. The children are grown, have graduated college, and are possibly considering their own little families. It is only your spouse and yourself now. You have done fairly well with your investments. You feel that you would like to leave something extra for your life partner. A small term policy would be good to take care of final expenses. If your estate is large you may want a policy sufficient to pay the Federal Estate Taxes when they fall due.

  There is one other thing to think about. You may have a grandchild that you just adore. You could buy a term policy to help with his or her college education.

• Business People

  Business people use term life insurance to fund buy sell agreements in case of the death of a partner or shareholder. They also use it to cover the business in case a key employee dies.

• Conversion Privilege

  Term life insurance is temporary insurance but it is cheap insurance. Some of them allow the owner to convert the policy to a permanent policy within a specific period of time. This helps guarantee that you will always have life insurance if you need it. You may find that as you get older you develop some medical condition that would prevent you from buying new life insurance. You would not qualify. If you have a term policy with a conversion privilege the company has to convert to any permanent policy you choose, regardless of the condition of your health.