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Term life insurance

Term life is by far the simplest and cheapest option out there.

Companies offer a variety of “Terms” meaning length of time. These can be be anything they want but typically fall in 10 – 20 – or 30 year lengths.

You then have your premium, which is based on your age and health at time of purchase.

So what you end up with is something like I purchased a few years ago. For $125 per year paid annually, I have $300,000 of coverage. It’s an all or none gamble. If I die in the 10 years the policy in is force, my wife gets the payout. If I live the full ten years then I get nothing and my payments to them stop. At that point I can buy a new policy under whatever terms are available.

Term policies are almost always convertable, this means that at any point during the term you can call your agent and ask them to turn your policy into a Whole life, Universal or Variable policy instead. Normally they will bend over backwards to do this for you, as they make a whole lot more money that way.

Term is a great option for anyone. It’s cheap, easy to understand and has no strings attached as the permanent life options do. If you are buying a home or having a child it’s a fast and easy way to protect them at little cost.

I suggest Term life to anyone who asks about insurance. The main reasons are the cost to value analysis and the investment options. If you can afford a product costing ten times more (whole life) why would you not just invest the extra in something that was built for that purpose?

-Jared

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