There are several types of life insurance, and it’s fair to say,
a variety of hybrids. Some offer guaranteed cash value, and some,
legitimate cash accumulation potential in addition to the
guaranteed cash value.
There are several types of life insurance, and it’s fair to say, a variety of hybrids. Some offer guaranteed cash value, and some, legitimate cash accumulation potential in addition to the guaranteed cash value.
Term insurance is one type – and is highly popular, most notably because of its relatively low cost. It will, like any life policy protect your loved ones (beneficiaries) from the financial harm that would occur if you were to pass on and therefore no longer be in a position to provide financial support for them. There is no cash value accumulation for this form of insurance.
So how long will term insurance protect you? Whatever period of time you select to be covered is the period for which you will be protected. Common terms are 10, 15, 20 and 30 years. This type of life insurance, like all others, is age and health sensitive. Things like weight, blood pressure, cholesterol, habits, driving record and family history can affect your rates. Naturally, with each advancing year, given your same health status, it will be more expensive to purchase.
The trick to purchasing life insurance is to know what you want why, and determine how it fits into your plan – you should have a plan. In the immortal words of T. Boone Pickens, “A fool with a plan is better than a genius win no plan.” Who and what is it that you want to protect? Will you wish you still had insurance when this type of insurance expires? If so, will you now be able to afford another policy? What about your health? Will it have taken a turn for the worse, making the insurance prohibitively expensive? Worse yet, will you have become uninsurable?
Let’s say your health is excellent and will remain excellent and you will not die prematurely from any cause. A big assumption, is it not? While we’re at it, let’s presume you can afford any type of life insurance you want. Now it’s a matter of your best investment. Buy term and invest the difference? Buy whole life?
