Affordable insurance life term - safeguarding your family's current lifestyle is one investment where it pays to be informed and knowledgeable.
You need to be aware of the various options for cheap insurance life term so that you can select the best insurance life term to suit your financial parameters and your lifestyle.
And very often, understandably so - insurance jargon can be quite overwhelming.
But, take the time to review the basic premise, the advantages and the disadvantages of the affordable life term insurance quotes that you will receive.
Then, make an informed decision that will save you money!
AFFORDABLE INSURANCE LIFE TERM DEPENDS ON:
How much can you afford to pay for the premiums?
How much do you expect to receive from group insurance plans and social security?
How much is your surviving spouse likely to earn after your death?
How many assets will your spouse be able to liquidate and what will they be worth?
How much does your family need for monthly bills and living expenses?
THE PREMIUMS THAT YOU PAY WILL DEPEND ON:
Your age - the younger you are, the cheaper your premiums are likely to be
Your health - generally better health poses less of a risk to the insurance company so premiums tend to be lower
(now, more than ever is a good time to invest in a healthy lifestyle)
Your personal lifestyle - excessive drinking, promiscuous habits and smoking will raise your insurance premium payments
Your occupation and hobbies - high risk jobs and extreme sports will add to your premiums
AFFORDABLE INSURANCE LIFE TERM - OPTIONS
Affordable life term insurance policies make provision for a savings component (or a cash value) that is built into your premiums.
Whole Life Term Insurance Policy:
The policy will have a cash value because the insurance company saves or invests a percentage of your premium in an investment fund.
This investment fund grows annually as a result of compound interest earnings and further payments made by the insurance company.
(The further payments have been included in your premium)
The cash value amount belongs to the insurance company (for the time that the policy is in place).
You, (the insured person), have to either cancel the policy or borrow the cash value from the policy if you wish to use it.
If you borrow the cash value (and then do not pay it back), the insurance company will deduct the borrowed amount (with interest) from the face value that is paid to your beneficiary when you die.
Loans borrowed from the whole life term policy are not taxable.
Modified Life Term Insurance Policy:
This policy is an adaptation of the whole life term insurance policy.
In the initial years, the premiums and the cash value are both relatively low.
When your income is likely to increase( during your middle age earning years), then both the premiums and the cash value will increase.
This is an advantage for younger people (they can afford life term insurance while they are not yet earning a significant income).
Limited Pay Life Term Insurance Policy:
You pay a higher premium over a fixed period of time (generally twenty years).
The policy is then considered "fully paid" at the end of the twenty years.
However, the insurance benefit is upheld until death (and you need not pay any further premiums).
(A single life insurance policy is very similar - except that you pay a cumulative one-time amount. This buys you a certain amount of cover until you die).
Pros And Cons:
If you can source affordable insurance life term, you benefit (especially if you are not very good at saving), from a forced savings plan in the form of the cash value that you may borrow from.
However, because of the forced savings component (which creates the cash value), bear in mind that the premiums will be high.
And remember, the "savings plan" doesn't belong to you. It belongs to the insurance company.
To access the cash value component of the insurance policy, you need to either:
- borrow the money from the policy or,
- suspend the policy.