Things To Consider : Term Life Insurance Costs

Survivor Protection – When a family member passes away, it can devastate a family.  In some cases, one of the family members brings in most of the income while the other takes care of the family.   If something would happen to the breadwinner, that could be devastating to the future of the non-working spouse and children.   It’s best to plan ahead and budget for term life insurance costs when you are young, but if you haven’t now is better than later.   Planning for survivor protection should be carefully planned with clear objectives, often seeking a financial advisor.

Estate Creation – Life insurance is the only vehicle that creates an immediate estate by paying a premium.  Life insurance can create an estate for a family incase of the unforeseen.

Cash Accumulation – Life insurance is primarily to create a lump payout at the time of death, but depending on which insurance you purchase, it can have a few other functions.   Some life insurance policies offer cash accumulation.  Usually, term life insurance costs less than a Cash Accumulation policy.

Liquidity – Life insurance will provide beneficiaries the ability to pay expenses that are associated with death.  Funeral expenses, medical bills, attorney fees, etc.

As you can see, there are many reasons why someone would choose to purchase life insurance.  Give us a call and we can find out which type of life insurance would be best for your needs.

Comparing and Buying Term Life Insurance

How is Term Life Insurance different from Permanent Insurance?

Permanent and Term insurance are both two forms of insurance that will provide a death benefit.  Some people refer to Permanent insurance as “cash value insurance” because it provides permanent protection for the insureds life as well as a cash value.

As you make the premium payments for your policy, the cash value increases and it’s net amount at risk decreases.

Permanent insurance has a level premium and a level death benefit but it combines both protection and savings into one.   Some people like the idea of combining the savings and protection into one premium or payment a month.

Term life insurance is a policy for a specific term.  Buying term life insurance is usually for a set amount of years and dollar value.

Term life insurance is pure protection.   Premiums may be level or decreasing with age,  depending on which type of policy you buy.   For example, you may buy a decreasing term policy if you want to make sure that your mortgage would be paid of in the event of your death.  If you have a 30 year mortgage, you would purchase a 30 year term life policy and it would decrease as your mortgage balance decreased.

When you are buying term life insurance you are buying a policy that does not have any cash value. It is strictly benefit.

Here are a few examples how a term insurance policy may be used :

- Insure a mortgage on a home.

- Cover the dependent children until they are of age.

- Cover a business debt. ( Buy/Sell )