Term Life Insurance?

by hirby

Think of life insurance this way: Term insurance is like renting a house - permanent insurance is like buying it.

With Term insurance premiums start low and increase greatly as you age and each term (1 year, 5 years, 10, 20, 30, etc) renews. Often there is a point where you can no longer renew it (age 75, 80, etc.). It builds no cash value, so you get nothing if you cancel or the policy expires. You can, though, purchase a lot of insurance for very little money compared to Permanent policies.

With Permanent insurance (Whole Life or, in some cases, Universal Life), the premiums are higher, but the policies build cash value. You can keep the policy forever as long as you pay the premiums.

Only you can decide if it’s right for you. There are so many variables in your life that affect your decision (you may not need life insurance after a certain age, or you may need it to pay estate taxes or pay off debt) and so many different types of policies that you really need to sit down with an insurance agent you trust and go over the options.

Good luck!

Kimmer.

The answer to the first question is, you wouldn’t want to change the policy to ‘permanent life insurance’.

You already have the right type of life insurance, term. Term is for a certain amount of time or term. It is very cost efficient, for example, $30/mo. for $200,000 face amount. The only thing you want to check is the length of the term. If you have the amount of ‘protection’, face amount, then make sure that it will last the amount of time that you will need it, term. Term can be for 10 to 35 years in length. Pick the one that is suitable to your needs.

Life insurance is a financial tool that you need for a period of time, when you have no money to take care of things if a bad situation arises.

Start a program to get out of debt now, start saving for the future, and render life insurance unnecessary in the future, (end of term).

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