Life
insurance is a contract that binds an insurance company
to compensate a beneficiary in the event of the death of
the insured person. If the insured person dies, the insurance
company will pay a cash benefit to the beneficiary (typically
a family member). Life insurance is often used to protect
a family against the economic hardship that could result
from the death of a primary income-earner.
Term
life insurance is a specific type of life insurance, which
has become very popular in recent years. Term life insurance
provides protection for a specified period of time, typically
5, 10, 15, 20, 25 or 30 years (this is called the coverage
term). The person to be insured selects the coverage term,
and a death benefit is paid to the beneficiary (or beneficiaries)
if the insured dies while the policy is still in force.
Term life insurance works well for people who need coverage
for only a specific period of time. For example, when a
child is born, a parent may take out a 20 or 25-year term
life policy to ensure that in the event of their death,
the child will be provided for through his or her college
years.
There
are two main forms of life insurance: term life insurance
and permanent life insurance (also known as whole
life or universal life). The main differences between
these two types of life insurance are: |
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Term
life insurance will pay a death benefit if the policyholder
dies within the term of the policy. Permanent life
insurance will pay a death benefit regardless of how
long you live, provided the premiums are paid. For
many people, the need for life insurance protection
decreases dramatically once they retire, since upon
retirement there is often significantly less income
to protect. Thus, for many people a term life policy
that extends to retirement age may be appropriate. |
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Term
life insurance is significantly less expensive than
permanent life insurance. Permanent life insurance
can be used not only as an insurance policy, but also
as an investment vehicle. With permanent life insurance,
a portion of your premium goes to building cash value
with interest. This cash value can be withdrawn before
death if needed. Term life insurance cannot be used
as an investment vehicle. However, the lower premiums
charged to term life insurance policyholders allow
them to invest the difference in whatever manner they
choose (401K, stocks, bonds, savings account, etc.).
Additionally, many term life policies have conversion
privileges which allow them to be converted to permanent
policies under some circumstances. |
These are some of the main differences between term life
and permanent life insurance. Deciding which is most appropriate
for you is a personal decision.
Affordability and Flexibility
Term Life insurance provides coverage for between 5-30 years,
and is typically less expensive than whole life insurance.
A Comprehensive Selection
Compare choices from a broad selection of quality Term Life
insurance plans to find the option best suited to your needs
and your pocketbook.
Term
Life Insurance Values
Not only can life insurance provide a replacement for lost
income, but it can also be used for mortgage and debt protection,
education expenses, estate taxes, and much more.
The
Best Prices Available
Because insurance rates are filed with and regulated by
your state government, you won't find the plans we sell
offered for less anywhere else.
Customer
Care is Our Priority
We want you to have the best insurance shopping experience
available. Your quotes are backed by licensed insurance
agents with years of experience helping consumers make the
most of their life insurance dollars
Click
here for more information.
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