I need your help...Term life insurance

Posted: Wed Jan 21, 2009 09:06 am Post Subject:

In term life policy the insured is required to pay a fixed premium amount for the term of the plan and if he/she dies within this term the beneficiary would receive the death benefit.

~Jeremy

Posted: Wed Jan 21, 2009 09:21 am Post Subject:

Jev, term life policies are cheaper compare to the other life insurance like-the whole life and universal life plans available in the market. However, in term life the coverage is only available for a certain period of time. Now, as Jeremy has mentioned if the insured dies within the tenure of the plan the beneficiary would receive the benefits, but that doesn't happen then the insured wouldn't receive anything. Hence, you may not wish to commit to the first option available to you. there are various other types of policies available in the market and looking into the other options may prove worthwhile.

I've read a great discussion on this board on various life insurance plans available you may too wish to read the same....

ampminsure.org/life/term-wholelife.html

Posted: Thu Jan 22, 2009 01:11 am Post Subject: Term Life Insurance Help

Hi Jevene,

Term life insurance is temporary life insurance usually for 1-30 years.

You choose a term for coverage and that is how long your life insurance coverage lasts, as long as you have paid your premiums.

Term life insurance is not an investment, no cash value builds within the policy.

Term life insurance is usually 2-3 times less expensive than permanent life insurance, because permanent life insurance is lifetime coverage.

Link removed by moderators

Posted: Thu Jan 22, 2009 04:32 am Post Subject:

Thanks to all of you for your prompt reply...

Posted: Thu Jan 22, 2009 08:33 am Post Subject:

Hi Jev

Term life insurance means you can buy life insurance for a specific period of time say 5 years to 20 years. This kind of insurance only pays in the event of the policy holder's death and not before that. However, if in the event that the policy holder does not die within the term for which the policy has been bought, he can renew the policy further. In this case the premium rates will go higher.

Posted: Fri Jan 23, 2009 06:04 am Post Subject:

You can get term insurance with return of premium, meaning if you outlive the term you can get all of the premiums back you paid in. It's a good choice for those who purchase it to cover an asset like a home, etc...

Posted: Fri Jan 23, 2009 07:31 am Post Subject:

One can also buy renewable term life policy to protect his/her insurability.

The premium on life insurance varies with the age of the insured. Hence, at old age you may have to pay a very high premium. Moreover, with age you may develop a health condition that's uninsurable. The “renewable” term life plan would help you protect insurability and keep your insurance rates moderate.

Posted: Fri Jan 23, 2009 08:17 am Post Subject:

Decreasing term life policy suits the needs of the policy holder when he has debts and/or mortgage loans to pay off.

With decreasing term life plan the death benefit reduces as you pay off the loans. Let me out an example before ya'll

Suppose, you have a mortgage loan of $2, 00,000 which you are paying off every month in installments. You can buy a decreasing term life plan with death coverage of same amount of your mortgage loan. The death benefits will reduce as you keep accumulating home equity through mortgage loan repayment. And during the term of the plan if the policy holder dies the insurer will pay the residue of the mortgage.

Posted: Fri Jan 23, 2009 01:11 pm Post Subject:

I don't agree with decreasing term, it is similar to the old credit life policies and it really isn't that much cheaper than regular term. Why not keep the term level and have the proceeds go to your own beneficiary vs. the lender? Most term policies are renewable to age 95 now, too.