Life insurance can provide financial stability for those that you leave behind should you pass away, but it isn’t always easy to decide exactly what type of life insurance would be best for you and your lifestyle. There are alternatives to the standard whole life insurance that you may be familiar with, however; one of the more popular of these is the term life insurance policy. Term life insurance provides similar levels of coverage to that which is offered by other life insurance types, while providing several unique benefits that you might not find with other insurance.
One of the most obvious benefits offered by term life insurance is that you don’t have to keep paying a bill on the insurance from the time that you take it out until you pass away. The policy is only active for a specific period of time of your choosing, so that you can take out an insurance policy on yourself for only the time that you feel like keeping the policy. These terms can vary in length from a year or less to 30 years or more, and many of terms (especially the smaller ones) have options to renew the policy once the term has reached its end. The majority of insurance agents who offer term life insurance policies will be more than willing to work with you to make sure that the term of your policy meets your specific needs as best it can without you having to take out a significantly longer or shorter term than you actually were wanting.
Another major benefit of term life coverage is the fact that it is generally cheaper than other forms of life insurance. Thought the policy’s premium may vary depending upon a number of factors, in most cases you will still pay less with a term life policy than you would with whole life. The premium rate is usually locked in when you purchase the policy, meaning that you won’t be facing rate increases as you age like you would with other policies; provided you buy a sufficiently long term for your term life policy, you can be paying the same low rate when you are nearing retirement age as you were when you purchased the term life policy years or even decades earlier.
A feature that is rapidly growing in popularity is what’s known as “return of premium” or ROP term life insurance. The premium that you have to pay for ROP term life policies tend to be a bit higher than standard term life insurance would be, but they carry the benefit of refunding you 100% of the amount that you’ve paid in to them with your premiums at the end of the term or return period. During the time that you have the policy, the insurance company invests portions of the money that you pay in with your premium so that they can see a return on that investment. Once the time comes for you to receive your premiums back, they are able to keep the profits that they received from this investment while letting you get back the money that you’ve been paying in during the insured term.
