Term life insurance is a type of insurance policy that runs for a fixed period of time which is agreed up when the contract is signed. It's a good idea to choose this type of plan if you don't have a big savings account and want to keep yourself covered until you can accumulate your savings. Because you are only covered during the dates of the contract you only have to pay premiums during the contract time as well. Once the contract is over you don't have to pay anymore. But that also means that you will not be covered and your family will receive nothing in the event of an unexpected death. A contract can run for any period of time. While you can get a contract for a year, most companies like to have longer ones such as ten or fifteen years.
The main purpose behind this type of life insurance is to protect your family in case of an unexpected death. Mainly, it protects them against things such as funeral costs, mortgage payments, your kid's college education, and any debt you have acquired. Many people decide to get a policy so they can cover potential expenses in the event of a tragedy. It's a good idea to have this type of coverage for a period of time while you are still saving money and building a future for your family so that if something tragic does happen, they will be taken care of.
The disadvantage of term life insurance is obvious. You are only insured while you are under contract. If anything happens once the contract is up your family will not receive anything. Another disadvantage is that once the contract is over you will need to provide proof of insurability to get a new one. If you are older by time your term life insurance contract runs up you will be more of a risk and may have to pay a bigger premium every month. But, to avoid such a situation, you can buy a guaranteed re-insurability option that will guarantee that you will be insured no matter what shows up on your medical checkup.
If you are looking for a different kind of insurance plan, level term insurance provides a great option for you. It works in a similar way as having a contract for a stated period of time. A great advantage to this type of insurance is that the premiums will remain the stated price for the entirety of the contract. With other policies the premiums could be raised every year so in ten years you could be paying an incredible price to be insured. Level term insurance guarantees that you will always pay the same premiums. You must keep in mind that the longer the contract the higher the premiums will be because as you age your health worsens. But you will still save money because each time you renew a contract your premiums will jump.
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