Understanding Term Life Insurance

Understanding term life insurance, including the advantages of term life insurance, is vital to making a smart purchasing decision. This page is dedicated to help with understanding term life insurance and what goes into a term life insurance policy.

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Advantages of Term Life Insurance

Term life insurance is a type of life insurance that protects the subscriber from potentially problematic, unforeseen circumstances. Like all insurances, it is a smart investment for any person who does not have his or her own protection in the form of savings. One of the advantages of term life insurance is that, unlike whole life insurance, it is considerably more affordable for most people.

The word “term” is vital to understanding term life insurance, as it refers to the fact that this type of insurance expires after a previously agreed upon period of time. At this point, the subscriber would have the option to renew the policy at new terms, or find other means of protection. This is one of the useful advantages of term
life insurance for people who only want insurance up until a certain point in their life, such as retirement, when they estimate they will have saved enough money to rely upon for protection.

Understanding Term Life Insurance Premiums

Most term life insurance providers use the same or similar method as other forms of insurance. Based on a person’s specific variables such as age, type of job, health condition, and salary, a periodic premium is offered. This periodic premium is also based on the amount of coverage the subscriber requests. It is recommended that the average person should opt for coverage amounting to seven to ten times his or her salary. Other factors
should also be considered based on the individual’s realistic situation.

The younger the subscriber is, the cheaper his or her premium will be. Thus, it is in one’s best interest to subscribe early and also to be sure the terms of the insurance are realistic. If the policy expires before a person has found other means of protection, renewing a policy at an
older age will most likely be significantly more expensive.

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"Did you know that since 2005 the percentage of U.S. adults without life insurance has nearly doubled?"*