Christian Debt Recovery

Debt Financing Advantages And Disadvantages

September 20th, 2007 |

Author: Gavin

Advantages and Disadvantages of Term Life Insurance

Term life insurance is a type of life insurance that provides coverage for a certain period of time, or a term, at a fixed premium. When the term is up, the policy ends and the policyholder forgoes coverage, or must obtain further coverage with a different policy. If the policyholder dies during the term, the death benefit is paid to the beneficiary designated in the contract. Although term life insurance is a great option for many people, it is not a good fit for everyone. There are advantages and disadvantages to having term life insurance and you need to educate yourself to determine if this is the right type of life insurance for you.

There are many advantages to term life insurance including the fact that it will help pay for your funeral expenses, mortgage payments, and credit card debt after you have died. It will also provide your family with money to help provide for your children and your spouse, or any other person you‘d like to help out after you pass away. Many people purchase a term life insurance policy because it can guarantee that estate taxes do not eat up your entire estate when you die. And, term life insurance is a lot less expensive than a permanent life insurance policy.

Another benefit is that you can choose the number of years you’d like to be covered for, with most policies offered in 10-year increments. If you are worried about your age, don’t, as many insurance companies will provide term life insurance to people as much as 95 years old. The majority of term life premiums will remain the same for the entire term of the policy, making it easy to budget for. Finally, many term life insurance policyholders have the option to renew the terms of the policy, or they can convert to a permanent life insurance policy if they do it within a certain period of time.

Just like many other types of insurance policies, there are some disadvantages to term life insurance. The biggest one is that you have to die in order to release the benefit money. If your term is over and you are still here, you do not get any payment for all those years you’ve paid a premium. If you purchase permanent life insurance you can not only keep it forever, but you will most likely get back most, if not all of the money you invested into the policy if you terminate it early.

If you would like more information on life insurance at prices half off the usual cost normally offered in the marketplace, visit our web site for a discounted rate quote on lifeinsurance.

About the Author

Sean Johnson is a financial advisor for http://life-insurance-buyer.com as a referral agency that connects consumers with insurance products half off the usual cost.