Term Insurance

There are two types of life insurance available to you: term and cash value. Term is pure insurance, and cash value offers insurance and a savings program.

Term insurance offers a death benefit---and nothing more---for a specific time frame referred to as the term. This is the least expensive life insurance available when you are young, and as you age, the premiums increase. Term insurance is well suited for short-term needs such as mortgage protection, getting the kids through college, or until the at-home spouse returns to work. Term insurance is easy to purchase, and you can get quotes via the Internet.

Term insurance is available in several forms. You can purchase a one-year term policy, and the following year the premium will increase. Today, however, level-term policies are available that allow you to contract with the insurance company for 5-, 10-, 15-, and 20- year policies. You pay for the insurance on an annual basis. A decreasing-term policy is also available and is often used as mortgage insurance because the amount of insurance decreases very year. Don't bother with it! Purchase a regular term policy because you'll want to cover more that just the mortgage if you were to die.

I am of the opinion that most people do not need anything but pure insurance, and term will suffice nicely. However, when purchasing term, you want to keep in mind that, after the term is up, you may not be considered insurable if during the 10 years you survived cancer or a heart attack and would like to continue your insurance. As we get older, our families grow, our net worth increases, our responsibilities lessen, and our need for life insurance protection also lessens.