PROS AND CONS TO TERM INSURANCE

Term insurance offers an inexpensive way to purchase large amounts of coverage for a specified (albeit relatively short) amount of time. When you add in the fact that you can renew the coverage, as well as convert the policy to a form of permanent insurance, you have three very good reasons to purchase term insurance. However, the cost of the premiums continues to go up as you grow older and renew your policy. This cost is what drives people toward whole life, or another form of permanent insurance, and away from term. It’s also the reason why many people let their policies lapse and even go without any type of coverage.

Recently, the insurance industry has begun to offer a 30-year term policy, which helps combat the cost problem. By purchasing a 30-year level term policy, you could theoretically have the same coverage into your old age for the same premium amount. It’s important to make sure that your policy locks in the premium amount for the life of the policy, if that’s the way you decide to go. Remember, though, that no matter what the cost of term insurance, its objective is to provide a large amount of protection for an affordable cost over a specified amount of time.