Low Cost Life Insurance

Posted in Life Insurance

January 21st, 2009

If youre in need of life insurance but working with a budget, a low cost term life insurance policy may be the best life insurance option for you. In most cases, the premiums for term life insurance are usually cheaper than policies with an added cash value, such as universal or whole life insurance. If you are young, in good health, and looking for a straightforward, low-premium plan to protect your beneficiaries, then term life may be a good choice for you.

Benefits of a Term Life Insurance Policy

Term life insurance is simple and affordable. You can purchase a policy to cover yourself for a specified time period for example, one, five, or ten years. During that period, your beneficiaries will receive benefits in the event of your death. Unlike universal or whole life, a term life policy doesnt have any added cash value or tax benefits, but it carries lower premiums than either of those types of policies.

Drawbacks of a Term Life Insurance Policy

The fact that you are only covered for a specified term begs the question: what happens when the term ends? One drawback of this life insurance plan is that, if you decide to renew your policy at the end of the term, some plans may require proof of insurability, or a medical exam. For example, if the insured acquires a critical illness before the plan expires, under a non-renewable policy, the policy-holder would not be allowed to renew the policy or purchase a new one.

To make sure you arent caught in this circumstance, be sure to ask your insurance professional about renewable and convertible term life insurance options. For instance, a typical convertible plan might be a basic 10 year low cost life insurance policy with a standard premium over the life of the term. However, at the end of the term, you would have the option to “convert” your policy to a different kind of insurance policy, such as whole life insurance, with no medical exam.