Print Article for : American Term Life Insurance

Your Online Guide » Guide to Insurance » General Insurance Liability

[A509]American Term Life Insurance

by Lesley Lyon, Les

Life insurance can be of two types-whole life insurance and term life insurance. As the name suggests, whole life insurance covers the whole life, as long as the policy is held and is beneficial only on the demise of the policy holder. Obviously, the benefits of whole life policy depend upon the value of the policy at the time of death of the policy holder. A cash value on the tax defer basis is also accumulated. The dividends are paid throughout the life of the policy.

On the other hand, term life insurance, is evidently purchased for a certain period or term. If the death occurs within that period, an agreed upon amount to the beneficiaries is paid. The payment is not paid if the premiums are not paid or if the death occurs after the expiration of the term. Also, term life insurance has no cash value.

The premiums for term life insurance are low in the beginning of the policy and increase over time. It is not feasible to borrow against the cash value since cash value does not exist in term life insurance, unlike in whole term life insurance. The coverage for a term life insurance varies from five to thirty years and the longer the term, the more expensive the policy will be.

Term life insurance quotes can be obtained from multiple agents and there are lead generating websites that help in getting the quotes. Term life insurance quotes can be obtained instantaneously through websites from companies that vie with each other and alleviate the need to approach the agents for different quotes. Monthly premiums that suit the budget can be obtained for a term life insurance policy and it offers the feasibility of switching over to whole life insurance policy after a period of time.

Universal life insurance that covers everything can also be accomplished. Some of the companies may issue a policy without any medical examination depending upon the answers given to questions relating to the age of the policy holder, occupation and health and evidently, younger age gets a better quote.

Normally, term life insurance is cheaper than whole life insurance and more often than not, the difference between the two values in permanent life insurance and term life insurance is utilized to invest and make a profit. Hence, term life insurance is considered to be profitable and cheaper.

Term life insurance can be bought in increments of ten year term and twenty year term and the premium paid goes directly towards paying for insurance and nothing else and is rightly known as pure life insurance. The objective of term life insurance is to reduce financial risk for a fixed period and is a temporary life insurance.

Every one thinks that he or she does not requires insurance. Why should I? After all I am young and healthy and there is no reason why I should pay for something that I might not need it. All these questions have many answers depending upon the type of insurance cover you are considering to buy. But one thing is for sure insurance plays an important part in your financial plans and your future.

In a few cases, insurance is a mandatory provision that is required to fulfill. These can either be by law or by lenders. If you are planning to mortgage or take a home loan, no lender would like to risk the money he is giving and he would insist you on taking home owners insurance. Similarly if you are planning to buy a car, you will face two people forcing you to buy auto insurance, since it is mandatory by law as well as the lender.

The reason why insurance is necessary for you is that insurance provides you with blanket cover and protects you from any thing that no one can anticipate. Accidents, natural disasters and unexpected illness can strike you without warning. The cost of putting things in proper condition can be very costly. The medical bills, repair bills and other expenses can very easily finish your finances and bring you on to road immediately. Just consider, that one incident of fire at your home can put you in so much trouble. If you don't have insurance then you will have to shell out money to construct a new home along with the furniture and can spoil your entire life, and if you don't have money, you may even become homeless.

The most common type of insurance that people avoid is the health insurance. People try to take risk thinking that they are quite healthy enough so why to spend money on something that you may not require in your life. Believe me, these kinds of people end up paying more. Every one has to pay either to an insurance company or to a hospital or a doctor. No one is permanently immune, someday you may fall ill due to any small or a large disease and end up paying huge hospital bill, and so don't you think it is better to pay insurance company rather then to pay hospitals for treatment. After all just knowing that you have an insurance can give you much needed peace of mind.

Last but not the least is the life insurance, again a common misconception among many that this is a program which is not going to help them when they are alive and it will help the ones you are leaving behind after your death. But have you considered that in the event of your death, your family will have to shell out thousands of dollars just for your funeral cost. And if you have left any debts behind they will also have to suffer to repay that also or else they will lose possession of any estate that you leave behind for them. You can even buy a small life insurance policy that will help protect your near ones after your death. As you can see, insurance is important for a variety of reasons, and living without it is a risky gamble that you should not make.

Article Source : Pg. 31

About Author

Both Lesley Lyon & Angela Dalton are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Lesley Lyon has sinced written about articles on various topics from Sauna, Finances and computers and the internet. Visit for finding the best term life insurance solutions that offer high returns on. Lesley Lyon's top article generates over 90500 views. to your Favourites.

Angela Dalton has sinced written about articles on various topics from Home Management, Wireless Hidden Spy Camera and Life Insurance Companies. Angela is an expert in the field.Are you looking for ?. You can get a. Angela Dalton's top article generates over 74000 views. to your Favourites.