Let us take a few moments to understand low cost life insurance. Let us not only look at cost but let us examine the function of each low cost policy.
Everyone who has ever bought a life insurance policy knows that term life insurance is the cheapest type of life insurance you can buy.
Each type of term policy was designed with a specific purpose in mind...maximum coverage at minimal cost.
Level Term Policies
Life insurance was created to take care of women and children in the event of the death of the husband and father who was the sole breadwinner for the family at that time. In today's world wives work and in many instances earn more than the husband.
This husband was carrying a heavy financial load then. In some cases today he still carries the responsibility of the financial well being of the family.
He knows he needs a life insurance policy to protect the family in the event of his untimely death. He wants to buy as much death benefit as he can afford.
A level 10 year, 15 year, 20 year, 25 year or 30 year low cost life insurance policy would fit the bill, depending on the age of the youngest child. These are term policies with a level death benefit and a level premium.
Most of these policies can be converted to permanent policies within specific periods of time, depending on the company you do business with.
This is important as you may need to maintain the policy for a longer period of time to protect your spouse.
Low cost term life insurance policies are used for many purposes other than family protection. Business people use low cost life insurance to protect the business in the event of the death of a key man or key employee.
It can be used to buy out a deceased partner's or shareholders stock from the heirs. This is usually prearranged through a buy-sell agreement.
If your business is in it's embryonic stages you don't want to be paying out too much for life insurance so you buy low cost term life insurance.
Decreasing Term Life Insurance
More and more people consider it important to own their own house. Most people have a mortgage on their home.
Decreasing term life insurance can be used to pay off the mortgage if the homeowner should die before the property is free of all encumbrances.
This is known as decreasing term life insurance or mortgage insurance. The death benefit decreases as the amount owed decreases. The premium remains level throughout.
Mortgage life insurance is truly low cost term life insurance. The premiums are extremely low.
If you have a mortgage, or of you plan on buying a home with a mortgage, you should protect your family with a life insurance policy. Apply and get qualified.
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