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Permanent life insurance also has a cash value benefit. You should have a good understanding of both types of life insurance before you apply for and receive life insurance quotes from life insurance companies. Get Term Life Insurance Quotes and Permanent Life Insurace Quotes Here What is Term Life Insurance?Term life insurance provides life insurance for a specific duration of time, usually for 10, 20 or 30 years. Shorter time period life insurance policies are also available. The idea behind term life is there will be a finite period of time in your life you will have dependents that will need a source of income if you pass away. If you pass away during the term period, your dependents (beneficiaries) will receive the face value of the insurance policy from the insurance company. If you live beyond the term life insurance period, you do not receive any money. There isn’t a savings or cash value built up during the insurance term. Term life insurance rates are cheaper for this reason - so you can get more life insurance coverage with a term life policy than a cash value life insurance policy. The cost of term insurance goes up as you get older, which can make insurance premiums more expensive than cash value insurance in the long run. How to Buy Term Life InsuranceWhen you buy term life insurance, you need to decide how long you need the term policy to provide a benefit to your dependents. Take your dependents’ age into consideration, your current income and expenses. Two big expenses are any outstanding mortgages and college costs or future college costs. Ideally, you will have enough term life insurance coverage that will pay for all these costs. You also have the option of converting a term life policy into a cash value insurance policy in the future. You may renew the policy without a physical examination for the period of years specified in the policy. If you do make the decision to convert some or all of the term life to cash value, the premiums for the converted insurance will be higher for the cash value insurance. If you fail to pay the insurance premium for your term insurance, it will lapse without any cash value, as compared to a permanent type of policy that has a cash value component. |