Term Life Insurance Articles
4 Tips For Parents Looking To Buy Term Life Insurance Coverage
2010-03-27
Holding your newborn child, watching your little ones head off for their first day of school, helping your little bike rider pedal down the sidewalk for the first time without those training wheels; these are moments that make you as a parent stop and think about their future. A big part of their future hinges on your ability to provide for them. So, inevitably, your thoughts will turn to their future monetary needs and, finally, to term life insurance.
Term life insurance is the most basic form of life insurance available. There are other, more expensive forms of insurance, such as "universal life" insurance. But for many parents, especially those paying for the endless list of expenses that come with a growing child, term life insurance might be the best option available. First of all, it's cheaper than the other forms of insurance because it is designed to only pay a death benefit. "Universal life" policies have higher premiums because the additional money paid by the policy holder is invested by the insurance company with a promise to let "cash value" accrue with the policy. The cash value will be paid back to the policy holder sometime in the future or added to the face value of the policy and paid to the beneficiary should the insured die. "Universal" is something of a forced investment plan while term life is not.
Certainly, you need to get a specific term life insurance quote from an insurance company, but first consider what the insurance policy will be used for in the event of your death. You can do this by looking through your budget to determine what immediate, recurring and long term needs, your child will have when you're gone. Locking in a low rate early is essential. The younger you are and the better your health - the better your rate. With term life, your rate will be lower and usually locked in - meaning it won't go up - until well after your child is grown and is no longer your dependent.
Of course, if you die young your policy will pay a death benefit, but to whom? If you die young, your child will still be a minor. Therefore, while your term life insurance beneficiary could, indeed, be your child, the money should be placed in a trust fund overseen by an attorney or financial adviser. Deciding on your term life insurance beneficiary is, perhaps, even more important than getting a good term life insurance quote. But don't ponder the decision too long because rates continue to rise as you get older. Life insurance should be purchased as soon as the need becomes apparent to a parent.
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Holding your newborn child, watching your little ones head off for their first day of school, helping your little bike rider pedal down the sidewalk for the first time without those training wheels; these are moments that make you as a parent stop and think about their future. A big part of their future hinges on your ability to provide for them. So, inevitably, your thoughts will turn to their future monetary needs and, finally, to term life insurance.
Term life insurance is the most basic form of life insurance available. There are other, more expensive forms of insurance, such as "universal life" insurance. But for many parents, especially those paying for the endless list of expenses that come with a growing child, term life insurance might be the best option available. First of all, it's cheaper than the other forms of insurance because it is designed to only pay a death benefit. "Universal life" policies have higher premiums because the additional money paid by the policy holder is invested by the insurance company with a promise to let "cash value" accrue with the policy. The cash value will be paid back to the policy holder sometime in the future or added to the face value of the policy and paid to the beneficiary should the insured die. "Universal" is something of a forced investment plan while term life is not.
Certainly, you need to get a specific term life insurance quote from an insurance company, but first consider what the insurance policy will be used for in the event of your death. You can do this by looking through your budget to determine what immediate, recurring and long term needs, your child will have when you're gone. Locking in a low rate early is essential. The younger you are and the better your health - the better your rate. With term life, your rate will be lower and usually locked in - meaning it won't go up - until well after your child is grown and is no longer your dependent.
Of course, if you die young your policy will pay a death benefit, but to whom? If you die young, your child will still be a minor. Therefore, while your term life insurance beneficiary could, indeed, be your child, the money should be placed in a trust fund overseen by an attorney or financial adviser. Deciding on your term life insurance beneficiary is, perhaps, even more important than getting a good term life insurance quote. But don't ponder the decision too long because rates continue to rise as you get older. Life insurance should be purchased as soon as the need becomes apparent to a parent.
