What does "Term Life Insurance" mean? And is it a good plan?

Answer 1

Term insurance is just what it is called. You by one year, five, ten fifteen, twenty or morew years of term insurance. The cost is fixed for the term but will go up if you want to renew. The cost is much less than a whole life or universal life policy because there is no cash value building up inside a term policy.
Term insurance is a good alternative to mortgage insurance or any other credit life policy because the cost is much lower and the face amount of the policy is fixed for the term. Credit life policies are decreasing term insurance meaning that the coverage automatically goes down as the loan is paid off.
Term insurance also can be purchased with a conversion feature. This simply means that if for any reason you need to covert the insurance to whole life or universal life you can do so at whatever the premium would be at that time but you won't have to go through underwriting, meaning getting a medical report etc.

Answer 2

Term has been well-defined. Just a few additional thoughts for you regarding the second question.

1) Bless her heart, Suze Orman knows very little about insurance and annuities. Because she has such a bias against the insurance industry as a whole, a lot of correct advice she gets becomes buried in her diatribes against the carriers. Beware of financial demagogues who have as much at stake as an insurance agent that chases commissions.

2) Term insurance is great. However, few ever die during the in force term of the contract. That's why it's so inexpensive. Permanent plans of insurance are much more expensive, that is the cost-per-thousand of coverage is much greater because it guarantees to pay whenever the insured dies.

3) A good term policy has a conversion or exchange option that allows you to convert all or part of the death benefit to a permanent plan of insurance without the need to medically qualify (go through underwriting). That can be a big plus if your health condition changes. Make sure your policy has that provision.

4) Some companies will allow you to reduce the face amount of a term contract without having to write a whole new policy (all of them used to, but recently that has changed). Check for that, too, because you may not need a high face amount as your insurance needs decline. Being able to reduce the face amount will result in a corresponding reduction in premium. Typically, the lowest you can reduce the face amount to is $100,000.

Hope that helps round out the advice here.

Answer 3

Term life means it is for a specific term such as 10 years, 20 years, etc. If you die during the term, the insurance company will pay your beneficiary the face amount of the policy. If you live past the term, you have no insurance unless you renew at a higher rate. You can purchase much more coverage in term than in whole life. It is good if you are looking for a lot of protection for a small premium.

Answer 4

The other responses are correct. However, no one on a message board can tell you what is the best insurance plan unless you post all of your personal information (age, health, income, savings, debts, kids, etc)

Go talk to a licensed insurance agent or other financial professional. Insurance is just one facet of you very complex financial life.

Addendum: I find that most people will be best served owning BOTH Term and Permanent (Whole Life or Universal Life) insurance. Some of your need for insurance will disappear as your debts are paid off, your kids leave the nest and your personal savings grow. Many seniors still need some insurance to help pay for funeral expenses, medical expenses at the end off life (unless you are assured of being struck by lightening). Many seniors with a pension will have that pension stop at their own death leaving the spouse with less income. A permanent insurance policy can prevent that.

Answer 5

Term life insurance means just what it says. It is for a term. Depending upon how the policy is written, it can be 5 years, 10 years or greater. These policies ( I believe) are better than whole life, as most of them, when they are paid up, can be rewritten for another term. They generally cost less than whole life also, depending upon your age at the time of the policy. I personally have term life and like it much better than the whole life policy I cashed in quite a few years ago. The agent you are talking with might be more commission driven, so do your research as to which would be best for you.

Answer 6

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Answer 7

The previous correspondents have told you what it is. However, if you need cover to pay for your funeral expenses or to leave your dependants a lump sum, then Whole Life would probably be your best bet because it will pay out whenever you may die, so long as you pay the premiums.
Term Assurance is better to cover a mortgage or a loan which will finish at a given time. By the way, not all Term Assurances give you the option to renew at the end of the term and so what if you become sick and uninsurable? You may find yourself with no cover at all.
I would urge you to seek the help of a qualified Financial Advisor who may, or may not, advise you to have a certain amount of both.

Answer 8

Just to cover the gaps in the answers above. There are term insurance that covers you till 99 years old or even 121 years old. You should look around.

Anyway, how do you define 'good'. Different plans serve different people for different needs, that's why they were created. Select the one most suitable for your own situation. Use your judgement. Are you good with investing? Do you have discipline? Do you save regularly?

Speak to a Financial Planner to analyse your needs and budget before deciding what to buy.

Remember, there are no such thing in insurance as 'good' or 'no good', choose only insurance that serves your unique needs

Answer 9

Term life is "pure" insurance - a straight bet between you & the insurance company that you will die during the "term" of the policy. It's the cheapest way to get the most coverage - doesn't have all the gimicky "cash value" and "investment" properties that are such a waste.

Answer 10

At this site you can get quotes in just a few minutes http://HELP.QUOTES-FOR-INSURANCE.NET/-uyyfpKD613

RE What does "Term Life Insurance" mean? And is it a good plan?

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