Term Insurance is VERY Popular & There is a Great Need for It… Sometimes…
There is definitely a place for having a term life insurance policy in most families lives…. BUT, you need to understand what a “term” policy IS and what it IS NOT.
Term Life Insurance is For a “Term of Time”
First and foremost, look at the name itself; “term”. By name alone it suggests that it’s a type of life insurance product that is designed to be held in place for a specific term of time. Right? Get it? It’s not “whole life” which would suggest a policy that one puts in place to be held on to their entire life. It for a specific term of time.
Term Life Insurance is excellent for those that are seeking high amounts of coverage for some specific term of time.
Maybe you wish to ensure that your home is paid off for your spouse, should the unthinkable happen. Maybe you want to ensure that your children receive an excellent college education (very popular), or maybe your estate has grown over the course of your life and it’s sizable, and you would like to see it end up in the hands or your heirs, not the government. In that case, you would put a term policy in place to help offset possible estate taxes.
The downside is that these policies expire. Maybe in ten years, or twenty years. Each policy is different. But, each expires after a “term” of time.
Term Life Insurance is “Pure Insurance”.
The beauty of Term Life Insurance is that it is very cheap to own. And the younger you acquire it, the cheaper it is.
It’s cheap because Term Life Insurance has no cash value, accumulates no cash value, it can be referred to as “pure insurance”. It’s an expense, not an investment. With Whole Life Insurance, there are these things. There is an accumulation of cash value. Whole Life is an asset. It grows. It can be borrowed against in an emergency. Whole Life costs more because of these features (and will be discussed elsewhere on our site).
Term Life Insurance Rates Change
Usually speaking, rates change in Term policies.
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