Is Term Life Insurance Right for You?

Term life insurance is valid for a specified amount of time, which is indicated on the policy itself. This temporary designation is different than whole life insurance and other similar policies, which are permanent in nature. When you pass away, and if your death falls within the scope of the policy, the face value amount will be distributed to those who you have listed as beneficiaries. Finally, a cash value is not associated with term life insurance. When the policy expires, a payout does not accompany the completion date.

Annual renewable term insurance allows you to renew the policy annually, however, the price increases each year. The cost of such a policy is based on your age. The likelihood of death increases with each passing year, so the chance that the policy will be fulfilled increases. Therefore, the premiums will also grow.

You have several options relative to the expiration of a term life insurance policy. The number of years involved with the policy span in increments of five years, beginning with five years and ascending to thirty years. You can also purchase a policy that expires upon your sixty-fifth birthday. Another option is to buy decreasing term life insurance, which allows you to pay a fixed amount annually as the face value actually decreases with each passing year. This is beneficial for loved ones who wish to pay off the remaining amount on your home upon your death.

A financial expert may help by giving you tools and information needed to make decisions regarding your future investment plans.

This information is presented to educate the reader and does not constitute professional tax and legal advice.

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