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Life insurance is a necessary product for anyone who has dependants. A consumer will need to decide whether permanent life insurance or term life insurance most suits their needs. This article explains term insurance.

Term or temporary life insurance will remain in force for a specific time period that typically lasts between one and thirty years. At the end of the term the insured may have the option to convert or renew the policy. It is ideally targeted at consumers looking for inexpensive, short term cover to financially protect their family in the case of their death. If premiums are not paid the policy will expire.

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Myth #1

“I have enough life insurance at work.”

Group life insurance may not offer enough for your family to live on in the event of your death. Employer sponsored insurance will last only as long as you stay there and it ends in the event of a layoff or retirement. HR departments often do not inform a departing employee that their coverage can be converted to a more expensive plan. Look at your total death benefit, imagine your family investing that amount at 8% and living off the interest. Can they can live on that income?

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The whole Life Insurance is a form of permanent insurance policy. It provides just what its name implies, insurance coverage for the entire life of the insured.

This means to say that as long as the premiums are paid, the coverage continues until the insured dies or reaches some predetermined advanced age (usually 100 years old).

The expression of “Whole Life” insurance has no reference to the period in which the premiums are paid, only to the duration of the protection, i.e. protection for whole of life.

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The number one rule when you are buying life insurance is to shop around! We ran quotes on ten of the top life insurance companies for the same individual, and the same 20 year term and $100,000 policy, and we found that the premium varied by as much as $300 a year!

Before you shop, think about your needs. Most of us need more life insurance while our children depend upon us for food, clothing, and education. Then, after the children have left to support themselves, we only may need several thousand dollars to cover final expenses like funeral costs and debt settlement. Or we may use life insurance as a vehicle to pass wealth on to the next generation, and so we want to keep a higher dollar policy in force our whole lives.

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