Why Term Life Insurance Is Most Suitable For Insurable Purpose

We have been told that for the purpose of insurance life term policies are the best. Indeed so and there can be many reasons for that; but we will talk about a select few now. Let us first take up the cost factor because to be effective insurance policies should always be affordable. It is a fact that only a term life can provide a large benefit at an affordable rate; all other policies are overpriced.

However, let me first explain why a life insurance policy should always be cheap. There are two main reasons for that. Firstly, a life insurance policy rarely offers anything other than peace of mind. Very few people actually die premature and so in very few cases, one gets any benefit out of the claim amount. Consequently, unless the rates are low, one may lose the motivation to keep the policy running for long and we all know that, no benefits can be claimed unless the policy is in force at the time the insured dies.

Secondly, if the financial situation of the policyholder takes a downward turn, an insurance policy is generally the first to be sacrificed. When the present condition becomes tough, spending a huge amount on future need fails to get the priority. If the rates are reasonable, there is chance that the policyholder may keep the policy running. Living uninsured is never wise. If you do die uninsured, your family will have a tough time eking out a living in a decent manner.

Therefore, for insurance purpose, always buy a cheap term life insurance. It is true that it does not provide anything other than death benefit, while a whole or universal life insurance policy offers a chance build up an asset along with the death benefit. Yet if you examine those policies closely, you will understand how the cash value policies are more beneficial for the insurers than the insured.

Let us now look into the pitfalls of buying a cash value policy. Always remember that, these policies are overpriced and it is the amount above the cost of insurance, which is invested in different funds to grow the cash value. Therefore, the money is basically yours and you pay that in addition to the cost of insurance. However:
• If the insured dies while the policy is still in force, the carriers retain the cash value amount as their profit and release only the death benefit.
• Contrarily, if you want to take out your investment amount while you are still alive, you will have to surrender the policy, which in other words means that you will have to forego the coverage and live uninsured

A term life insurance on the other hand is cheap; the low price not only helps to keep the policy running even under worst condition, but if you are financially disciplined, you can always invest the difference in lucrative funds and get better returns for it. Indeed, today, you can avail every kind of life insurance quote on line. If you compare them, you will realize that the price difference is indeed such that building your asset using the difference is truly feasible. Moreover, separating the insurance from investment has two major advantages:
• If the insured dies while the policy is running his beneficiary will have access both to the insurance amount and to the investment.
• If you want to take out your investment, you do not risk losing the coverage. Know that, keeping the policy in force through out the vulnerable years is very important.

Another advantage of buying a term life insurance is that it is a straightforward policy and so you can almost get one with your eyes closed. You just pay certain amount as premium at regular intervals and if you die, your designated beneficiary will receive a stipulated amount as death benefit. Contrarily, no return can be claimed if you outlive the term. Today buying life insurance online has become easy, but if it is a term life insurance, it is easier still. Just go through the exclusion clauses before you put you final signature on the paper.

Indeed, to financially protect themselves the carriers often exclude certain deaths from the ambit of their coverage. Death by suicide within the first two years is one of them. Therefore, be careful about such aspects. What is more, if you provide misinformation and the carriers find that out later on, there is a chance that your coverage will be cancelled and so try to provide the correct information, even if that means that you have to pay more. Remember, it is your family’s safety, which is at stake; you cannot afford to take any chance.

Article by David Livingston of EQuote, who is a specialist in everything life insurance. For more information on life insurance rates and no medical exam life insurance, visit his site today.