Who might benefit from term life insurance

People of all ages have a lot of choices to make when they apply for life insurance. The first choice they must make is between term insurance and whole life insurance coverage.

Term life insurance is a policy that guarantees a death benefit in exchange for premium payments for a specified time period, rather than for the entire life of the insured; this makes the premiums inexpensive.

As you age and your health begins to deteriorate, a term insurance policy can be a dangerous proposition. Unless you have a guaranteed renewability rider on your policy, you could run the risk of being uninsurable after the term of your insurance policy ends. This is potentially risky for any individual, since everyone has the propensity to become ill unexpectedly. For older people, it’s especially risky.

Whole life insurance policies pay a death benefit in exchange for premiums for your entire life. You never need to go through underwriting again (as long as your premiums are paid on time) and you don’t have to worry about the benefit expiring.

So while life insurance rates for term insurance policies can be very attractive, it’s important to first consider whether or not it’s a practical risk for you to take and expose your family to.

See also: Comprehensive Life Insurance Calculator

Life Insurance tips: This tip was originally posted on 5-19-2010 at 8:29 am.

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