Term Life Insurance Articles
Term Life Insurance And The Theory Of Decreasing Responsibility
2010-09-07
When buying life insurance, there are dozens of potential options, including whole life insurance, universal life insurance, term life insurance, and many secondary forms of these major insurance types. It can be very difficult to decide between them. Most policy buyers eventually opt for a term life plan, as a term life insurance quote tends to be much lower than the quotes for other types of life insurance. However, the low cost of term policies aren't their only benefit. Life insurance agents often point to the theory of decreasing responsibility, which is a powerful argument for buying term life insurance as a part of a long term financial plan.
The theory of decreasing responsibility is fairly simple. The basic idea is that life insurance buyers have certain financial responsibilities such as debts, and they have an obligation to their beneficiaries to pay off these debts. This coincides with the reason that most people look into life insurance in the first place-to protect their families from the debt of a mortgage, credit card bills, and the cost of their lifestyle in the event of a family breadwinner's death. However, these responsibilities decrease as a person gets older. Mortgages and credit card debts are paid off, and children become old enough to pay for their own costs. The policyholder's responsibilities gradually decrease until life insurance is no longer a necessary form of protection.
According to the theory of decreasing responsibility, term life insurance is the best form of life insurance for covering a policyholder's responsibilities, as it combines a low cost with a high amount of coverage. When the policyholder pays off his or her debts and is capable of providing for a family with investments (such as retirement accounts or stocks), the policy can be canceled. This theory requires the policyholder to use term life insurance as part of a long term financial plan, not as a complete solution. However, because most investments offer better returns than universal or whole life insurance, many policyholders choose to look for a low term life insurance quote rather than investing money into these other insurance types.
If you're looking for a way to protect the financial state of your beneficiaries from the costs of your death, the decreasing responsibility theory holds that term life insurance can be a great buy when combined with a solid fiscal strategy. Ultimately, you'll have to look at your finances and decide whether term life insurance is right for you, but many households benefit from the low costs and high benefits offered by term life insurance.
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When buying life insurance, there are dozens of potential options, including whole life insurance, universal life insurance, term life insurance, and many secondary forms of these major insurance types. It can be very difficult to decide between them. Most policy buyers eventually opt for a term life plan, as a term life insurance quote tends to be much lower than the quotes for other types of life insurance. However, the low cost of term policies aren't their only benefit. Life insurance agents often point to the theory of decreasing responsibility, which is a powerful argument for buying term life insurance as a part of a long term financial plan.
The theory of decreasing responsibility is fairly simple. The basic idea is that life insurance buyers have certain financial responsibilities such as debts, and they have an obligation to their beneficiaries to pay off these debts. This coincides with the reason that most people look into life insurance in the first place-to protect their families from the debt of a mortgage, credit card bills, and the cost of their lifestyle in the event of a family breadwinner's death. However, these responsibilities decrease as a person gets older. Mortgages and credit card debts are paid off, and children become old enough to pay for their own costs. The policyholder's responsibilities gradually decrease until life insurance is no longer a necessary form of protection.
According to the theory of decreasing responsibility, term life insurance is the best form of life insurance for covering a policyholder's responsibilities, as it combines a low cost with a high amount of coverage. When the policyholder pays off his or her debts and is capable of providing for a family with investments (such as retirement accounts or stocks), the policy can be canceled. This theory requires the policyholder to use term life insurance as part of a long term financial plan, not as a complete solution. However, because most investments offer better returns than universal or whole life insurance, many policyholders choose to look for a low term life insurance quote rather than investing money into these other insurance types.
If you're looking for a way to protect the financial state of your beneficiaries from the costs of your death, the decreasing responsibility theory holds that term life insurance can be a great buy when combined with a solid fiscal strategy. Ultimately, you'll have to look at your finances and decide whether term life insurance is right for you, but many households benefit from the low costs and high benefits offered by term life insurance.
