Term Insurance

Term life insurance is the most common type of life insurance, since it is more affordable than whole life insurance.  Like any insurance plan, should you die, your money will be given to your dependents.  Term insurance can be bought in any time increments, but is purchased in increments of years. The cost of your premium will usually be determined by how old you are when you purchase the insurance, and will increase every few years throughout the policy’s term.  Therefore, the older you are, and the higher risk you have of dying, the more your premiums are going to be.

What to expect with term life insurance:

• Variable premiums.  How much premium you pay annually will be determined by your age.  Do not expect a constant rate – your premium will increase every few years.  However, this is still usually lower than whole life insurance premiums.
• Selection of premium frequency.  The policy holder can choose whether to pay smaller premiums more often, or large premiums annually.
• Tax free money for your successors.  Most policies include money benefits that are relieved of federal taxation.
• Insurance coverage only for the term of the policy.  If your policy expires, and you do not renew it, you will not be covered should you die.
• Convertible policy.  The policy holder has the ability to change his policy to whole life insurance, should the need arise (some restrictions apply).
• “Riders” allowed.  Term life insurance offers a policy holder to add an additional person to their insurance.  In most cases, holders choose to insure their spouse.

Term life insurance should be considered if you need a lower premium with flexible payment options or if you only need coverage for a set number of years,   Whether you choose whole or term insurance is dependent on your individual situation, and either type of insurance will help to secure the safety of your dependents.