Do Not Ignore These Term Life Insurance Facts

A recent survey that was conducted to evaluate people’s response towards term life insurance policies brought out some interesting facts. It was found that a majority of people did not “like” term insurance, mainly because of its low cash value, despite the fact that term policy is one of the cheapest plans available. Although a small number of people do purchase a term policy, they are not entirely convinced about the benefits. However, you cannot deny the numerous benefits that this policy offers.

Here is a paradox. According to another study, term insurance is the dumbest policy available in the market. The reason for calling the policy “dumb” is the fact that only 2 percent of people collect on it. This means that 98 percent of people do not receive appropriate value for the money they spend on life insurance. Although this study does bring out this shocking fact, experts refuse to call term policy “dumb”. They give the following reasons for it.

• Life insurance is not an investment; it is insurance. The only way to get the best benefits out of the policy, be it term or whole, is to die. You definitely would not want to die, no matter how much benefit you gain from the policy
• Term plan is the best policy that you can buy for temporary requirements. For example, a father of two school going children will want to purchase a term insurance until the time when his children graduate out of college and become independent. If something untoward happens to the father in the meanwhile, the family gets the money and the children can complete their studies without financial hassles
• Additionally, since the policy costs so little, the family gets to save money and invest in some other better option that can secure the children’s future in a more profound manner. However, if you are looking for long term benefits, a term policy might not be the best suited because its cash value is low
• Seniors could benefit a lot with this policy. Firstly, costs associated with the policy are lower. So, premiums do not cut into medical expenses or other personal expenses at a time when finances tend to low. Secondly, term life is available for small amounts as well. So, if a senior wants a policy that can just cover his or her funeral expenses, there is nothing better than term policy because of premiums are low and death benefits are good
• Cost effectiveness of term life coverage applies to the entire term.  You need to confirm premium rates with the insurer because some policies increase premiums as your age increases. If you buy a policy that charges consistent rates of interests, you save much more money than any kind of life cover
• Term policy gives flexible coverage and the limit is your choice. So, you don’t have to compromise on coverage while still enjoying low premium rates

Considering these facts about term insurance, you definitely cannot call it dumb. The only drawback that you find in this policy is the low cash value. So, if you are ready to increase your monthly expenses by paying higher premiums for the want of higher cash value, instead of paying lower premiums for a robust death benefit, the choice is entirely yours.

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