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.

Term Life Insurance And Buy Sell Agreements

A common business use of term life insurance has been the buy sell agreement. It's especially useful in small businesses or partnerships where the death of one person can significantly affect the continuing functioning of the business at hand. Let's look at the buy sell agreement and how affordable term life rates address the underlying insurance need in such as scenario.

Let's face it...one of the few ways to get ahead in the U.S. is to start your own small business. The average size of companies in the U.S. is between 3-5 people. The big headlines may be for large corporations (and recently, their layoffs) but the engine of this country is small business. The two or three person corporation, partnership, or LLC is very common especially for younger companies. In such a company, each partner typically has to wear many hats and the the loss of any partner would significantly affect the ability of the company to remain an ongoing concern. There's also the contractual obligations and contracts that bind the partners together in the first place. What happens if one partner passes away.

This is where buy sell comes into play. Essentially a buy sell agreement is between the partners or owners of the company. It states that if one person passes away, the other person will buy out their stake in the company. Since this can be large sums of money, the best way to do this is with life insurance. Term life insurance is so inexpensive that it provides a simple and effective means to providing the cash needed so that the surviving partner can buy out the deceased partner's share of the company. In this case, the beneficiary of the term life policy would be the other partner. It's important with life insurance to have an insurable interest. This means that you have some vested interest in another person. The partnership or company ownership establishes this interest.

The reason for a buy-sell is pretty obvious. Let's take an example. Let's say that two partners have opened a company together. It's a straight partnership with 50/50 ownership. They both put in $75K each to start the company which was a large investment for both individuals. The unforeseen happens and one partner passes away. Now what? Most partnership contracts and/or incorporation papers deal with what happens when one partner no longer wants to participate or passes away. It usually involves the other partner(s) "buying out" the shares of the leaving or deceased partner. At a minimum, the surviving partner above must now come up with another $75K. He/she may not have this amount or coming up with this amount of money suddenly will put a severe financial burden on him/her. Or worse yet, what if the person cannot come up with the $75K? There may be surviving family members who require that the contract be fulfilled and the deceased partner's share be purchased with the money going to the surviving family or the deceased's estate.

It's best to avoid these issues altogether with a simple buy sell agreement based on term life insurance. Term is cheap life insurance so it makes it very easy to these issues. You can look at term life insurance on an individual basis and even as a small group (business term life insurance). The latter may offer better rates and more flexible underwriting requirements. We would be happy to run both options to see what makes the most sense. You can request this service with our fast life insurance quote form.

(ArticlesBase ID #1252263)
Dennis Jarvis
Dennis Jarvis is a licensed insurance agent concentrating on term life insurance. Shop, compare, and instantly quote multiple carriers with professional guidance and resources.
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About the Author:
Dennis Jarvis is a licensed insurance agent concentrating on term life insurance. Shop, compare, and instantly quote multiple carriers with professional guidance and resources.

Author: Dennis Jarvis
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