Term Life Insurance Articles
Why Term Life Premiums Are Less Expensive Than Whole Life
2010-09-14
Term life insurance is a boon for anyone looking for an insurance policy. Even though it is a very basic life insurance policy, it is inexpensive. Term life insurance can be bought for any time period. Term life insurance pays benefits only upon the policy holder's death. While some people might consider this a disadvantage, not everyone can pay the high premiums for whole life insurance. Compared to whole life premiums, the premiums for term life insurance are much lower.
There are quite a few differences between term life insurance and whole life insurance. However, the one thing that most people like about term life insurance is the low premium. Whole life premiums are higher because some of the money that you pay is put into a savings program. The longer the policy continues, the higher the cash value. The premiums for whole life insurance remain the same and do not change over the years. On the other hand, the premiums for term life insurance are lower than whole life insurance, because there is no cash value associated with it.
The premium for term life insurance will depend on whether it is an annual renewable term insurance or a level term insurance. If it is an annual renewable term insurance, the premium will be low in the beginning. As you grow older, the premium amount increases. With level term insurance, on the other hand, the premium amount remains the same for a certain number of years. At the end of each time period, the premium amount increases.
The premium for term life insurance also depends on other factors. One of them is the age of the policy holder. The younger the policy holder is, the lesser the premium. Also, non-smokers have an advantage over smokers. The premium for non-smokers will be lesser than the premium for smokers. Similarly, the premium will also depend on your current state of health. The healthier you are, higher the chances of the premium being low.
When it comes to insurance policies, you can actually have the cake and eat it too. You have the option of converting a term life insurance policy to a whole life insurance. This must be done with the same insurance company and before the age of 75 years old. This way you can enjoy the benefits of low premiums that come with term life insurance and enjoy the cash value benefits that come with whole life insurance.
Term life insurance is the right choice if you don't wish to pay too much in terms of premium. It ensures that your family is taken care of in the event of your death.
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Term life insurance is a boon for anyone looking for an insurance policy. Even though it is a very basic life insurance policy, it is inexpensive. Term life insurance can be bought for any time period. Term life insurance pays benefits only upon the policy holder's death. While some people might consider this a disadvantage, not everyone can pay the high premiums for whole life insurance. Compared to whole life premiums, the premiums for term life insurance are much lower.
There are quite a few differences between term life insurance and whole life insurance. However, the one thing that most people like about term life insurance is the low premium. Whole life premiums are higher because some of the money that you pay is put into a savings program. The longer the policy continues, the higher the cash value. The premiums for whole life insurance remain the same and do not change over the years. On the other hand, the premiums for term life insurance are lower than whole life insurance, because there is no cash value associated with it.
The premium for term life insurance will depend on whether it is an annual renewable term insurance or a level term insurance. If it is an annual renewable term insurance, the premium will be low in the beginning. As you grow older, the premium amount increases. With level term insurance, on the other hand, the premium amount remains the same for a certain number of years. At the end of each time period, the premium amount increases.
The premium for term life insurance also depends on other factors. One of them is the age of the policy holder. The younger the policy holder is, the lesser the premium. Also, non-smokers have an advantage over smokers. The premium for non-smokers will be lesser than the premium for smokers. Similarly, the premium will also depend on your current state of health. The healthier you are, higher the chances of the premium being low.
When it comes to insurance policies, you can actually have the cake and eat it too. You have the option of converting a term life insurance policy to a whole life insurance. This must be done with the same insurance company and before the age of 75 years old. This way you can enjoy the benefits of low premiums that come with term life insurance and enjoy the cash value benefits that come with whole life insurance.
Term life insurance is the right choice if you don't wish to pay too much in terms of premium. It ensures that your family is taken care of in the event of your death.
