Is term life insurance a good alternative for income replacement?

Term life insurance is a policy meant to offer protection for a specific amount of time, as the name itself suggests. It’s very popular due to the fact that it is significantly cheaper than permanent insurance.

tumblr_me2eqyFGDL1ragi7h-300x199Why? Because as whole life or universal insurance guarantee a pay-out when the insured dies,  when it comes to term policies the death benefit is granted only if the carrier dies while the policy is in force. Thus, term insurance offers limited protection, usually ranging from 5 to 30 years.

Term annuities have numerous variations and can be bought as to remain available for how lung the insured thinks is necessary. A popular form of term insurance is annual renewable policies, which guarantee renewability for a vast amount of time, with premiums increasing as the carrier grows older.

However, is term life insurance a good alternative for income replacement? Some forms of term annuities, such as disability insurance, are. However, standard term protection is designed to be a death benefit only contract. Thus, the only way your beneficiaries could receive the face amount of the policy is if you pass away while insured.

This fact alone makes term insurance a precarious alternative for income replacement. Most insurance officials suggest that adults should purchase insurance until near seniority, as retirements funds and savings should be sufficient in their late years.

If you decided to buy life insurance, decide on whether you need permanent or term protection. We recommend that you book an appointment with a licensed, experienced insurance agent before taking any serious steps into this direction. S/he will work as a „middleman” between you and the insurance company of your choice, explaining terms and claims of insurance while having at heart your best interest.

A good way to find out what the marketplace has to offer is by using online life insurance quotes. A quote represents the estimated cost of life insurance, and is calculated based on the information supplied by the applicant. Click here for free online insurance quotes! Don’t forget – the ideal policy might be just one page away.