Term Life Insurance is traditionally one, if not the most affordable types of life insurance, offering coverage for a predetermined period of time for a set rate. Since the face amount of coverage as well as the time period covered is set, there’s no cost of insurance increase due to aging, nor will the benefit amount decrease for any reason during the policy period.

Why purchase Term Life Insurance?

Term Life Insurance imageIn addition to the basic reasons for purchasing life insurance, those who want ‘no frills’ life insurance protection turn to term life insurance. It earns no cash value and offers no additional benefits.

Term Life Insurance provides:

  • Low Cost Protection for short-term financial needs such as home mortgages, car loans, school expenses and other outstanding debt
  • Guaranteed premium for the term of the policy
  • Tax-free death benefit
  • Variety of coverage periods
  • Short Term Obligation
  • Simple protection for additional debt

The ‘No-Frills’ Life Insurance Option

Many prefer to use life insurance as a protection-only product versus a protection-plus-investment product. Often times an individual will state the intention of investing the difference in premium between a term policy and a ‘permanent’ policy, thus taking a more hands-on role in investing than that afforded by a universal life plan while still enjoying the protection provide by life insurance.
The lower cost of term life insurance makes it ideal for those on a limited budget, as well as additional coverage for short-term debt.

Permanent life insurance is purchased based on current financial need. Term life is an excellent and affordable way to protect a surviving spouse from the financial burden of new debt, such as a car loan or student loan. When additional debt is incurred (think of a car loan), term life insurance can be a more affordable option than increasing the face amount of an existing policy…and you can set the coverage term to closely, if not exactly match the loan term.