What Is Term Life Insurance?

Term Life insurance is for life coverage only, and does not include any investment obligations. You can buy term life insurance for up to a 30-year term. With this kind of policy if you die during the time frame, your beneficiary gets whatever money is stated on the policy.

Term life insurance can be the cheapest, considering that you are not paying as high a premium. If you are looking to protect your loved ones from costly funeral bills, arrangements, and other bills that come up unexpectedly during these times, your family will be covered. You won’t collect any interest on this kind of policy, it is just the face value.

Many who are concerned about the financial burden on their loved ones often start these policies as they get older. Many who couldn’t afford it earlier in their lives, may now find that this is important, and now it is too late to start an investment life insurance policy.

Whole life insurance can be really expensive. Not only are you paying the premiums for the policy itself, but it often requires an added investment payment, which is supposed to be put towards retirement. One of the problems with this is you could find much better ways to plan and save for your retirement on your own.

Not only do they lock you into a forced investment, these policies have high commission and other fees, sometimes up to 100% of the first year’s premium. Many don’t even know what the final calculations are on their returns, and many change over time. With this plus the premiums, even if it paid 6% interest per year, you still wouldn’t have accumulated any interest at all.

If you invested just over $2600 in a mutual fund, at just 10% interest annually, it would have accumulated over two hundred dollars by the end of the year. This is a good thing to get into, especially as you get close to turning fifty, and are in relatively good health. Term life insurance at this age is something to really look into.

If you are not familiar with term life insurance, or life insurance in general, it would be a good idea to study up on it. You should at least learn the different terms used that are associated with life insurance, like investment components, what the differences are between stocks, bonds, and money market accounts, just to name a few.

It is a good idea to really shop around when seeking term life insurance policies, there are many resources online that can help. You should really do some researching on what types of policies are available, what their payments and benefits are like, and for what kind of time periods are offered. It is a good idea to familiarize yourself with what interest rates are, and tax deferments.

The more you know about these things, the less likely you are to get into trouble later on. It is also a good rule of thumb to always, look over any paperwork and make sure it is just as it was discussed with the agent, and if there is any discrepancies, don’t sign anything until it is resolved.

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