What Is the Purpose of Term Life Insurance?
The subject of purchasing life insurance can be a delicate topic for many families. However, purchasing the right type of life insurance will provide you and your family with financial peace of mind in the event that you die unexpectedly. Term life insurance is a particularly affordable option.
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Features
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Term life insurance policies offer "temporary" coverage for a specified "term," or number of years. Many of these policies have "adjustable premiums," which means that your premium increases over the length of your policy period as you age even though your insurance payout does not change.
Comparisons
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Term life insurance is often compared with "whole life" insurance. Whole life insurance includes an investment aspect that allows investors to retrieve amounts paid into the policy without affecting the payout integrity of the policy. Whole life insurance typically involves a higher premium than term life insurance; however, whole life insurance is considered a more permanent insurance option than term policies.
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Considerations
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Term life policies typically offer greater coverage per premium, especially for younger consumers; while whole life policies carry higher premiums, the premiums may not change over the life of the policy and funds paid into the policy may be withdrawn at any time.
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