Term Life Insurance Articles
When To Choose An Annually Renewable Term Life Insurance Policy
2011-03-28
One of the primary reasons to purchase annually renewable term life insurance is to make certain of some specific future event. If, for example, you want to ensure that your son or daughter will be able to attend college, you can purchase enough insurance to completely pay for the tuition, room and board.
What is term life insurance? It is a life insurance policy that has a specific end date. If you die before the end date of the policy, the benefit is paid to your beneficiary. If you die even one day after the end date of the policy, no benefit is paid. Annually renewable term life insurance is a policy that can be extended by the person insured with no additional medical examination, but usually at an increasing premium every year to reflect the increasing age of the person who is insured. Term life insurance is also the least expensive form of life insurance. If you are not looking for life insurance that extends forever, term can be your best buy.
In the case where you want to make sure that your son or daughter gets to go to college, make an estimate of what the total bill will be for four years of college at some point in the future. Then take out an annually renewable term life insurance policy that can extend a couple of years beyond the year your son or daughter is scheduled to graduate. You can end the policy when actual graduation occurs.
Other circumstances where an annually renewable term life insurance policy can be a fit for your financial planning include, wanting to provide for a surviving spouse and kids. Monthly costs are more when you have a kid at home to feed and clothe. You may have a permanent life insurance policy to provide for your spouse after you are gone, but an annually renewable term life policy can also be in place to support the kids while they are still at home, a need that ends when they leave home. A term life insurance policy can provide the required additional benefit during the time that they are still at home.
Another reason to have a need for a specific time limited benefit is to pay off the balance of an existing mortgage, leaving the house free and clear to your survivors. After the mortgage is fully paid, this need no longer exists and the term life policy is no longer a need.
All in all, an annually renewable term life insurance policy can be a valuable tool for your financial planning. A term policy will fill in when expected expenses are greater and eliminated when those expenses are past.
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One of the primary reasons to purchase annually renewable term life insurance is to make certain of some specific future event. If, for example, you want to ensure that your son or daughter will be able to attend college, you can purchase enough insurance to completely pay for the tuition, room and board.
What is term life insurance? It is a life insurance policy that has a specific end date. If you die before the end date of the policy, the benefit is paid to your beneficiary. If you die even one day after the end date of the policy, no benefit is paid. Annually renewable term life insurance is a policy that can be extended by the person insured with no additional medical examination, but usually at an increasing premium every year to reflect the increasing age of the person who is insured. Term life insurance is also the least expensive form of life insurance. If you are not looking for life insurance that extends forever, term can be your best buy.
In the case where you want to make sure that your son or daughter gets to go to college, make an estimate of what the total bill will be for four years of college at some point in the future. Then take out an annually renewable term life insurance policy that can extend a couple of years beyond the year your son or daughter is scheduled to graduate. You can end the policy when actual graduation occurs.
Other circumstances where an annually renewable term life insurance policy can be a fit for your financial planning include, wanting to provide for a surviving spouse and kids. Monthly costs are more when you have a kid at home to feed and clothe. You may have a permanent life insurance policy to provide for your spouse after you are gone, but an annually renewable term life policy can also be in place to support the kids while they are still at home, a need that ends when they leave home. A term life insurance policy can provide the required additional benefit during the time that they are still at home.
Another reason to have a need for a specific time limited benefit is to pay off the balance of an existing mortgage, leaving the house free and clear to your survivors. After the mortgage is fully paid, this need no longer exists and the term life policy is no longer a need.
All in all, an annually renewable term life insurance policy can be a valuable tool for your financial planning. A term policy will fill in when expected expenses are greater and eliminated when those expenses are past.
