I Need To Know What Term Life Insurance Is?
Posted September 23, 2009 – 4:24 am in: term life insuranceTerm life insurance is a no frills life insurance policy. It is a death benefit for a specified period of time. Unlike other types of life insurance, there is no cash value or investment associated with it. You pay $x for x period of time for x amount of insurance. It is the cheapest way to insure someone’s life.
Tags: Insurance, Know, Life, Need, Term, What
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The way I explain “term life” insurance is it’s the difference between buying a house and renting a house. If you are buying a house that means one day you will eventually own it and if you are renting it that means that you are paying for the luxury of having somewhere to stay but you will never own it. So, “term life” would be renting and “whole life” would be buying. Some older people would fare better by getting term instead of whole for the simple fact that most whole policies that are worth buying start at about 20 years or so and go up. Which in turns means that the older person would probably die before the policy is fully paid off or vested. But it is totally up to the individual of what type of insurance you want.
Term life insurance is basically insurance that you rent. You get better rates and a better pay out than the whole life, but you can never pay it off. Many of the personal finance gurus say it is the only type of insurance you should buy. However, you need to figure that out for yourself.
People in the business are too immersed in it to explain it clearly. Term insurance is termed; i.e., it expires. That’s the rent analogy. It’s also why it’s cheaper (lots) than whole life. A term insurer bets that you’ll outlive the policy term. That’s why they take blood tests, ask if you smoke, and won’t issue big policies to skydivers.
Term life insurance is just like renting insurance. But sometimes you pay the price for just renting it. Kinda like buying a car… would you rather rent a car and make payments or buy it. Me… personally… I am an insurance agent and I recommend usually whole life.
If it is even needed at all.
Term life insurance is a policy that expires in a certain amount of years, if the person has not died. Unlike whole life, which matures when you are 100 or pays out the death benefit when the person dies. Term life insurance is much cheaper than whole life.