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Why Buy Level Term Life Insurance? |
By:
Greg Haehl |
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Term life insurance is often called temporary life insurance.
Term life insurance is purchased to cover some type of asset
over a fixed period of time. Term life has much lower rates than
permanent plans because of these shorter time periods. Level
term insurance is purchased to cover short intermediate-term
obligations. The time periods can be 5, 10, 15, and sometimes 20
years. Short term debt is often covered by a level term policy.
Family budgets are full of short term debt obligations. Families
buy automobiles, appliances, furniture, and many other household
goods and are in debt for these items over a short period of
time. When you purchase these items you are often approached to
buy credit life insurance to cover these obligations. It would
be less expensive for a family to purchase a level term policy
or rider to cover this kind of short term debt.
Level term policies are better than credit life policies because
the insured can choose the beneficiary. The credit company is
often the beneficiary with credit life insurance and so the
insured has no option in how to use the money at time of death.
Level term policies are better buys to hedge against inflation.
The decreasing term policy is a little less expensive but the
coverage declines. The cost of goods and services never declines
and so a level term policy will at least maintain its original
face amount for the whole time period.
You may want to compare level term rates and decreasing term
rates. The difference may not be that much and so level term
insurance may be a better purchase in the long run. The best
type of life insurance planning includes a base of permanent
insurance for life time needs and additional forms of term
insurance for temporary needs. Level term life insurance is an
excellent option for short term or intermediate term debt
obligation.
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Article Source: http://www.friendsofvista.org/articles/article29282.html |
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