Term life insurance provides a great option for people looking for life insurance coverage for a specific period of time. When compared to traditional life insurance, there are both advantages and disadvantages.
What kind of coverage is provided with term life insurance?
This life insurance option provides you with coverage for a specific period of time or ‘term’. You agree to a fixed time period of coverage and to pay the associated fees during that time period. Should you pass during that time period, the insurance is paid out to the beneficiary. If you do not pass during that time period you will have to go on without coverage or purchase another round of coverage from your insurance provider.
Term life insurance is usually used for income replacement for the beneficiary but can also be used to cover the costs of the funeral and other costs associated with the passing of a loved one. Some of the benefits associated with term life insurance is the fact that is can be extremely affordable. If a low monthly payment is something you require than looking at term life insurance may be a good option. This type of insurance also often has a high payout rate, which means if you pass, your loved one will be covered and taken care of. Plans are often flexible in terms of how long the time frame is, what payout you are looking to provide and the monthly cost you can afford. Many life insurance companies such as State Farm and MetLife have flexible programs that can be adjusted to fit your needs.
If you happen to have life insurance through your current employer or directly with an insurance company, adding on term life insurance may still be a good option. There are times in everyone’s life when you have higher than normal expenses. Whether it is putting a child through college, buying a new home or you in laws move in you can get term life insurance to cover those expenses should something happen to you.