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How Term Life Insurance Is A Better Investment
Article 9 of 14 in How to Find the Best Type of Life Insurance
Managing your life insurance needs can be challenging. Because you have decided that term life insurance is right for you, you should properly manage your policy and your finances accordingly.
TIP: Maintaining a good relationship with a reputable agent can take some of the guess work out of managing your life insurance needs. Through an annual term life insurance review or insurance needs analysis review, you can make sure you are properly covered. During this review, you can review any renewable term life insurance policies you may have and determine if you have a need for more insurance.
Term Life Insurance Review
If you have had a life changing event-death of a spouse or loved one, marriage, divorce, the birth of a child, bought a new home or a bigger home, or lost your job-you should get a term life insurance review or a insurance needs analysis from a reputable insurance agent. You may find that you need to add an additional term life policy to overlap your existing coverage, or prepare to modify your plan when the term expires. Because term life insurance is flexible, it can accommodate changing circumstances. Getting a term life insurance quote if you have any life changing event is a smart action to take in order to make sure you have the proper coverage in the event of death.
Choosing the Best Term Life Insurance
There are many term life insurance policies to choose from and which type is best for you is determined by your goals or needs. When you choose a term life policy, it is important to consider your options.
There are some Return on Premium Term Life Insurance that give you a term policy that will return your entire premium to you in the event there is no death payout. That right! If you out live your term policy, you get your premiums back. Say you paid $30 a month for 30 years. You are now 30 years old. If you live to 60 years of age, you will get $10,800 back!
There are also Annual Renewable Term (ART) Life Insurance policies that provide coverage for one-year periods. You can renew most ART policies for successive one-year periods without having to provide evidence of insurability, (evidence that you are still in good health and have not terminal illness) up to a specified age or within a specified period. This type of term insurance policy can allow you to get the coverage you need in the short term allowing you to take the money you would have spent on a more permanent option of insurance and invest it.
TIP: ART policies however, are for short-term needs and premiums increase annually upon each renewal. The premium is based on your age at the time of each renewal. So if you need coverage in your later years premiums may become unaffordable. Therefore BE CAREFUL before you buy. Understand this policy fully as you could end up without insurance. Talk with an insurance professional before you buy an ART policy.
Term Life Insurance and Investment
Another important part of managing your term life insurance is what to do with the money you save on your premium payments. Permanent life insurance plans can be forced savings or investment accounts because a portion of your premiums goes towards long term financial growth. Term insurance lacks this option, but does give you flexibility by charging lower premiums and giving you the opportunity to invest separate from your life insurance plan.
Using life insurance premium as an investment can be tricky. Term life insurance is an excellent option for life insurance coverage with a reliable payout in the event you die within the policy period. Offering extremely low premiums, term life insurance can be the answer to providing coverage as well as saving a nest egg. This win/win makes looking into a term life insurance quote an option that should not be overlooked. If you have any questions about managing your term life insurance policy, you should ask an experienced agent. To find the right term insurance policy for you, click here to get a quote at the Free Advice quote center.
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