Term Life, Whole Life, or Universal Life Insurance. Which Policy is Right for Me? [Part 1]
There are many types of insurance, and one of the most prevalent is life insurance. 2016 statistics from Best Life Rates show that 60% of people in the United States have some form of life insurance and 68% of people stated that they would recommend life insurance to others. However, it is not that simple; life insurance comes in many different types and each type offers a different amount of coverage. It is important to understand the difference between all of the different types of life insurance so that you will know exactly which New Jersey Life Insurance policy is best for you. This will be the first part of a three-part series on the types of life insurance, and will focus on term life insurance.
What is Term Life Insurance?
The most simple definition of term life insurance is that it is a subset of life insurance that works for a specific period of time. As CNN Money writes, many people find that they need life insurance only until they have saved enough money in other areas, so term life insurance works well for people who only need coverage for a short, specific amount of time. It often works well for younger people and young families due to its more affordable cost; according to Business Dictionary, the premium cost of term life insurance is far lower for younger customers.
Why Should You Use Term Life Insurance?
Term life insurance works well for consumers who are younger and only need coverage for a limited time, but there are other factors to take into consideration when choosing your type of life insurance. As the Wall Street Journal states, in addition to being 2.5 to 4 times less expensive than whole life insurance, term insurance is relatively easy to buy and comparison shop for.
However, the important thing to remember with term life insurance is that, since it only applies to a set timeframe, it can expire, and if you find yourself older and in need of more coverage, it can be tough to attain more term life insurance. In addition, term life insurance does not give any refunds for cancellations or death, and premiums will eventually get higher as time passes. Term life insurance can be a temporary, cheaper alternative to whole life insurance, but it is important to plan for the future and be aware of any additional costs.
