Most cost-effective term life insurance policy for a family

Most cost-effective term life insurance policy for a family

By LifeQuotes.com

It’s no secret that times are tough and money is tight. Fortunately, term life insurance provides inexpensive protection for you and your family.

So what is term life and what makes it unique from other life insurance plans? The biggest difference is that it provides protection for a limited period of time, notes Edward E. Graves, author of “McGill’s Life Insurance.”

Generally, these periods are from one to 30 years and can last to age 65 or above. The face amount of the policy becomes payable if you die during the term.

Another unique characteristic of term life coverage is that premiums are fairly low. Term contracts protect against the contingency of death, not the certainty of it. Under a permanent insurance plan, the insurance company knows it’s going to have to pay death benefits since everybody dies eventually and this leads to higher premiums. However, a term-life contract only covers a fixed interval of years with a possibility of renewal. In many cases, term contracts may not cover the years generally associated with the highest mortality rates. In other words, you may pay more or be denied a term life policy if you are older.

Smart Money helps people determine whether term life insurance policies are right for them with their “Whole Life Insurance or Term?” article online.

“It’s an affordable alternative when people cannot afford the higher premium associated with permanent life insurance,” says David Theile, Director in Life/Health Product Management at State Farm.

It should be noted that term life policies come with restrictions on the amount of insurance, the age when it can’t be renewed, and the age before it must be obtained.

Nevertheless, their low costs make them ideal if you’re looking to save money.

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