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What You Should Know About Term Life Insurance

Term Life Insurance is meant to be a protection plan for your family and loved ones in the event of your untimely death. Any debt that you owe such as college tuition, or a mortgage, and credit cards can really make things difficult for your loved ones in the end, and can make your estate worth a lot less than what you thought it was worth.

When you purchase a term life insurance policy, you are basically purchasing a policy or plan that provides your loved ones with protection for a predetermined amount of time. The payment or “death benefit” is paid only if the person who has the policy dies within that term or period of time they are covered. Most insurance companies have various periods of coverage time that you can choose or pick from. From as short of time as one year, or even five or ten year periods of coverage.

The policyholder decides who will be paid upon their death. There are in some cases laws on the books which have requirements as to who you can leave your benefits to upon your death. For example, some states require that the beneficiary is your spouse if you are married. Some life insurance companies will not allow you to leave your benefits to your pet. So make sure you check on these requirements before designating someone as your beneficiary, although in most cases you can leave the benefits to whoever you choose.

There is one downside to having term life insurance. It doesn’t have any cash value to it at all. In other words, it isn’t worth a fraction of a penny unless you die. So unlike whole life insurance policies, you can’t borrow money against the policy in the event of an emergency. Another downside is that with term life insurance, as you get older the policy begins to cost more, and you can be cancelled due to your age. With whole life you can keep the policy as long as you wish.

When you go to purchase life insurance, make sure you ask as many questions as you can think of. Is term life insurance for you, or should you choose whole life insurance. If you don’t plan on dying anytime soon, and plan on living to be a hundred, then term life insurance is probably not the right choice. Whichever you choose however, you can be assured that your loved ones will be cared for.

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