available, is it always in your best interest to get the cheapest term life coverage? And what does "up to 70% off your term life insurance" really mean?
Cost effective term life is simply basic life that pays out a lump sum after your death. The premiums for these polices are generally low because the policies are like your house insurance; there is no cash value. There are two basic types of term life – decreasing term life and level term life insurance, but decreasing term life is gradually being phased out.
What is Term Life Insurance?
Level term life policies are not as cheap as decreasing term life but do a better job of protecting you. Both of these life policies have many similarities. The reason for the different price structures are that level term life policies, owned by you, can pay off your mortgage and still leave a pay out for your family. The group term life you buy through your bank, has a decreasing balance but keeps the same premium. A cheap decreasing term life policy pays only the bank a lump sum to clear your mortgage; it doesn’t leave any money to pay those you leave behind.
Term Life - Mortgage Priorities
If paying off your mortgage is your priority, then you should look to level term life insurance. You might have a 20 year mortgage but a 10 year level term life policy. As you will need to renew the term life policy at the 10th anniversary, you might want to consider making it a 20 year term life policy.
Article Source: Articles Beyond Better
Ivon T. Hughes of the Hughes Trustco Group is a licensed Broker. Author of The Life Handbook. Get a FREE Copy TODAY! Email:info@trustco.ca Web:www.hughestrustco.com
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