The Basics of Term Life Insurance

							  Term Life Insurance
      Explained


         E-Course Series



                       Part 1




The Secret to Saving More And Protecting Your Family's Future.
               The Basics of Term Life Insurance
Introduction

Should you "buy term and invest the rest" or fuel your life insurance with "the
power of cash value"?

Term life insurance is often touted for its "pure insurance protection," which
includes none of the cash value features inherent in whole life policies. Term life
insurance covers you for a specific period of time - usually 10, 15, 20 or 30 years.
You can also buy term insurance that covers you until you reach a certain age,
usually 65 or 70. Term insurance policies expire at a set time and if you don't die
within the term there is no pay-out of the policy. If you do die within the term,
your beneficiaries receive the money tax-free.

Generally, you purchase term life insurance to protect your loved ones from
debts or provide for short-term obligations. For example, if you and your spouse
own a home and you were to die tomorrow, your spouse would have to pay the
mortgage on his or her own. If you had a term life insurance policy, your spouse
could receive enough money from the policy's death benefit to pay off the
mortgage.

Term insurance doesn't just cover specific debts, however. If you have children,
term insurance can protect your family's finances, providing money for college
and living expenses if you die before your children are fully grown.

Click Here To Get a FREE No-Hassle Term Life Insurance Quote Now!

Medical Exam is Usually Required

When you apply for term life insurance coverage, the insurance company will
probably require a medical exam before issuing a policy. The examination is
basic, covering your height, weight, medical history and blood and urine testing.
With the blood and urine tests, the insurer looks for specific medical problems.
Positive results could affect your premium, or even your ability to buy a policy.

Smokers will pay more for life insurance, although cigar smokers might get less
expensive premiums than those using cigarettes. If you smoke marijuana, but
not cigarettes, you still must admit to being a smoker on the policy application.
Insurers don't generally differentiate between different types of smoke
inhalation. (Marijuana users must also disclose their drug use.)
Different Flavors of Term

As you age, the likelihood you will die sooner increases. That's why older
individuals pay more for life insurance. However, affordable term life insurance
is possible if you shop around. If you are looking for low cost term life insurance,
you can lock in low premiums by buying for a "level term" policy. That means for
a specific time period, say 20 years, your premium rate stays the same. Many
term policies give you the option to renew your coverage at the end of the term
without undergoing another medical exam, although your premiums will rise for
the next term - often substantially.

A less popular policy is "annual renewable term." This gives you coverage for one
year with the option of renewing it each year for a specified duration, such as 20
years. With this policy, your term life insurance rates will go up every year you
renew and are calculated based on the probability of your dying within the next
year.

If you'd like to have term life insurance in place to provide for beneficiaries yet
you are confident you'll outlive the policy, you could consider "return of
premium" term life insurance. Under this type of policy, if no death benefit has
been paid by the end of your insurance term, you receive all your premiums
back. It pays to shop around for a policy like this, but on the low end you can
expect to pay 50 percent more in premiums than comparable traditional term
life insurance.

If you have trouble finding life insurance because of illness or a troubled medical
history, you can turn to guaranteed issue life insurance coverage, sometimes
called "quick issue" or "simplified issue" insurance. Guaranteed issue policies
require no medical exam, but you pay a higher premium in exchange for the
guaranteed coverage. That's because the insurance company takes on more risk
in insuring people without knowing their medical condition. Guaranteed issue
policies can require waiting periods before coverage kicks in. They might be the
only option for some people. A life insurance broker can search the marketplace
for a guaranteed issue policy that meets your needs.

SAVE up to 70% on your policy! Get a FREE No-Hassle Quote Now!

How Long a Term?

Figuring out which term you should buy - 10 years, 20 years, 30 years or some
other number - requires a major review of your debts, financial needs,
dependents' needs - and when all those might change. Jack Dolan of the
American Council of Life Insurers suggests you ask yourself, "When will my
dependents reach financial independence?" Also look at major debts, such as
mortgages or other loans, and when those are due to be paid off.

Guenther Ruch of the Wisconsin Insurance Commissioner's office says it's a
good idea to review your life insurance needs carefully, both when you buy the
policy and on a regular basis throughout your life. "You may not have the
coverage you need. You may have more than you need," Ruch says.

Ruch has the following recommendations for anyone buying life insurance, or
anyone who already has coverage:

Schedule a routine "check-up" with your insurance providers at least once a
year.

Shop around when you're in the market for a new policy. Term life insurance
rates vary considerably among insurers.

Remember, an insurance policy is a legal document. Read it carefully and make
sure you understand it.

"Perhaps you want to leave assets for your heirs, or for charity, or you need the
death benefit for business-planning purposes. These are all areas where life
insurance can play a role, but it's really designed for financial protection," Dolan
says.

Get a FREE No-Hassle Term Life Insurance Quote Now! Protect your family's
future

Term vs. Whole Life Insurance: The Cash Value Debate

Variable universal life insurance (VUL), a form of permanent life insurance, is
popular because it offers a cash value that may build up with interest over time.
The interest earned is based on the performance of the stocks, bonds, or other
investment portfolios in which you choose to invest your premiums.

Some financial planners advocate VUL policies because they force you to save
money in the cash value component. Others recommend you buy term insurance
for the cheaper premium, and then invest the money left over in mutual funds or
other investments. VUL also allows you to change your death benefit and
subsequent premium payments over time.
Cash value in life insurance should not be considered a traditional investment
because any partial withdrawals or loans will reduce your death benefit. Also, if
you withdraw your cash value in an amount exceeding the premiums you have
paid into the policy, you will face a tax bill. In addition, every year you own the
policy, more of your premium goes to pay for the cost of insuring you and less
goes toward the cash value.

                       Paying too much for Life Insurance ?

                  Click Here to SAVE up to 70% on your policy!