AFFORDABLE TERM LIFE INSURANCE QUOTES

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Understanding Affordable Term Life Insurance


There are many commercials that pop up on television and radio promoting the value of getting an affordable term life insurance quotes. Now, most people have a clear understanding of what a term life insurance quote entails. However, they may be unaware what the concept of term life insurance centers on. For those that may have a number of questions regarding this form of coverage, the following is a brief overview of what it entails.


As with other forms of life insurance, term life insurance centers on offering a “death benefit.” That is, when the insured dies the beneficiaries will be paid a settlement amount based on the amount of coverage that the insured purchased. Again, this is standard with all life insurance policies. However, term life insurance is different in one respect. Specifically, term life insurance only provides coverage for a certain designated period of time. This timeframe is, of course, the term mentioned in the title of the coverage.


In short, the coverage is purchased for a specified term. When the term expires, the insured has the option of purchasing a new policy. In some instances, it may be the exact same policy at the same price. In other instances, it could be a new policy at an increased price or different terms. And, of course, the insured could also downgrade the policy for a lower premium. Really, this is the major benefit of purchasing a term life insurance policy. A person can save a lot of money on the purchase of a policy since the policies are being purchased in fixed terms.


This makes term life insurance perfect for those that may be on a proverbial budget. Anyone looking to make sure their family is properly covered in the advent of an emergency can take out a short term policy at a reasonable cost. That alone is a huge endorsement for term life insurance.

Cautionary Tales on Terminating Your Life Insurance Policy

There is no denying the importance of life insurance. As an integral part of your financial plan, life insurance can protect you and your dependents in the case of loss of income due to death. For a young couple, insurance is especially important as they have years of expenses ahead of them. From mortgage payments to their children's education, life insurance is the ideal vehicle to protect assets and offset expenses. But, as obligations dwindle over time, older retired couples might wonder if life insurance is really all that necessary. After all, their children have left the home, their debts and mortgages have been paid off and the monthly insurance premiums may just be considered an unnecessary expense. Under these circumstances, one might consider terminating one's life insurance policy. Another reason for wanting to terminate your life insurance policy may be that you just can't afford the premiums anymore. Due to illness, loss of employment or other commitments, the monthly premiums are getting more and more difficult to meet. Is termination your best option then?

However, any financial expert would advise you against terminating your policy prematurely. Life insurance is a long-term commitment and should not be treated as a mere investment tool or a quick-fix device. If you terminate your policy ahead of schedule, you will end up paying additional charges and fees. If you have a term life insurance policy and you cancel it, you will receive nothing in return as there is no cash value component attached to such policies. With a permanent life insurance policy, you would have built up a cash value along with your premium payments. When you terminate such a policy, you need to pay a surrender fee in order to access the cash component. Often the surrender value will be less than the total amount of premiums paid over the years. If you have already taken out a loan against the policy and have not repaid the amount at the time of cancellation, you might not get anything in return. Additionally, there may be taxes incurred as well. Apart from all the warnings against the charges and fees that you will incur, ultimately terminating a life insurance policy leaves you and your family vulnerable once again. In such troubled economic times, the peace of mind attached to knowing that you are protecting your family from financial difficulty is priceless.

Here are some other options you can try out before terminating your policy irrevocably:

If you can't afford your insurance any more '

  • Review your coverage. Speak to your insurance company and see if you can opt for a lower coverage amount for a smaller premium. Still keep in mind your needs though and make sure that the cover is enough to meet them
  • Comparison shop ' Look around and compare products of other insurance companies to make sure you are getting the best deal for your situation.
  • Reduce other expenses ' As far as possible, try and keep your policy active. If it means cutting back on other expenses, it would be a worthwhile sacrifice. You may have purchased your policy when you were younger and in better health. Canceling it now and applying for a new one later on will only put you in a higher premium bracket unnecessarily.

If you feel your policy is not needed any more -

  • Gift the policy ' Did you know that you could gift your insurance policy by naming a particular charity as your beneficiary? If you feel that you can live without your life insurance benefits, you have the right to change beneficiaries from your spouse or family member to the charity of your choice. You will also receive a charitable deduction for the cash value of the policy.
  • Sell your policy - Another viable option is to sell the policy. There are several companies that will purchase the policy from you. As they will continue to pay the premiums, they will receive the death benefits after you die. For this option to be considered, you have to be over 65 years of age. The amount paid for the policy might vary from company to company so do your homework before finalizing anything.

If termination is your only option and you have a term life insurance policy, all you have to do is stop paying your monthly premiums and the policy will stand as canceled. In case of a whole life policy, you need to get the full picture from your insurance agent. You need to determine how much cash value you will receive if you terminate your policy and how much taxable income will be generated as a result of the encashment. Attached to all of the suggestion listed above are tax ramifications, therefore please speak to a certified financial planner or insurance expert before making any decisions.

(ArticlesBase ID #1194304)
Denise


About AccuQuote:
AccuQuote is a leader in providing term life quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term life insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.

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About AccuQuote:
AccuQuote is a leader in providing term life quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term life insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.

Author: Denise
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