Need low cost life insurance? Take a look at the budget friendly option of a term life insurance policy. Term life insurance policy premiums are generally much cheaper than cash-value policies (universal and whole), especially if you are young and in good health and a low cost term life insurance policy does exactly what you expect it to do by financially taking care of your beneficiaries if you die. Here's the basics of a low cost term life insurance policy:
Purchasing a Term Life Insurance Policy
You buy a low cost term life insurance policy with a specified time period, usually one, five, or ten years. During that "term" you pay a specified premium. Your beneficiaries will receive a death benefit if you die during the term of the life insurance policy.
Facts About a Low Cost Term Life Insurance Policy
Seems simple enough, right? Well, as with all insurance, there are little complexities and loop-holes you need to fill. For instance, the death benefit may not be the same throughout the term life insurance policy depending on whether you choose decreasing, level, or increasing term life insurance. And, what about when your term is over? That's where renewable and convertible term insurance comes in. Take for instance you want a basic 10 year low cost term life insurance policy with the death benefit to stay the same throughout the term life insurance policy, and at the end of the term you would like to "convert" to a different term life insurance policy such as a cash-value policy, without taking another medical exam. In that case you would choose a level term convertible life insurance policy.
Deciding if a Term Life Insurance Policy is for You
Term life insurance does not build cash-value or have the tax benefits like universal or whole life, but it can be a great option for someone who would like life insurance, but can't afford the higher premiums. Here is a check-list to help you decide if a low cost term life insurance policy is right for you:
Talking to Your Insurance Agent About a Term Life Insurance Policy
When checking with your agent on term life insurance, ask a lot of questions. Generally, agents do not receive as much commission on term life insurance verses cash-value policies so you may have to probe a little for more information.
Want to build cash value and have lifelong coverage? Check out whole life insurance: Whole Life Insurance Policy Choices