Term Life Insurance provides the most coverage for the lowest initial cost. The coverage is so great because the benefit is paid only if the insured dies within the designated term of the policy.
Term Life Insurance plays a vital role in proper financial planning. The most common reasons to buy Term are as follows:
The most common form of Term Life Insurance today is "Guaranteed Level." With Level Term Insurance, your protection and premiums remain constant throughout the term period. After your selected term expires, your premiums will sky rocket immensely if you keep your coverage. For planning purposes, you should not intend to keep your Term policy after term period.
Most Term periods are for 5-10-15-20 or 30-years; however, recently 5 year term policies have become virtually extinct. A newer term option offered by a few insurers is to dial down your term period to the exact time period you need such as 28 years.
Term Life premiums have gone down a lot since the early 70’s when coverage for a 35 year old was over $4 per 1,000 while today that same coverage can be bought for just $.33 per 1,000 assuming a 10 year $500,000. Thanks to technological advancements, insurers have been able to increase their efficiencies over the years. Term rates hit all-time lows in 2009, but have recently started to increase due to heightened insurer reserve requirements resulting from the 2008-2009 financial crisis.