Top Life Quotes Today - Speical Reports: What Is Term Insurance

What is term insurance and how to really understand what types of coverage you are getting when you purchase term insurance. I try to explain this to my clients in a very simple and down to earth way.

Term insurance is simple a contract between you and the insurance company. You promise to pay the premium for a certain amount of coverage, death benefit, and the insurance company promises to pay out a death claim to your beneficiary (family member) you have designated on your policy.

So you pay a monthly premium or monthly payment to the insurance company for a desire amount of coverage. Let say the policy is for 20 years and your monthly premium payment is $40 (this is all hypothetical), so you pay that for 20 years.

Now at the end of the policy term, 20 years, and your still living the policy term comes to an end. You can renew the policy at the end of 20 years, however, at your current age which typically makes this coverage more expensive.

Here comes the fun part and normally after I explain this to my clients they really get the difference between term insurance and cash value whole life insurance. See term insurance is like renting an apartment. You pay monthly to rent an apartment to provide shelter for you and your family.

When you purchase term insurance you are sort of renting an insurance policy. If you were to stop paying your premium your coverage stops protecting your family. Now there are some riders you can add to the policy that may cover temporary loss of income and things like that and I will be covering those things as this blog grows.

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Also Term Insurance does not build cash value. I once had a client that I met with and she was very upset when financial hard times struck her household and she can to discontinue her policy. she was not advised that her insurance policy was actually a term insurance policy and she would not get any of her premiums back.

Unfortunate in that respect,however, she once inquired about term insurance and I refused to put her in a policy based on her reactions at the time of her telling me her story.

Key points:

Term insurance does not build cash value
Term insurance expires at the end of the designated term
Term insurance can be paid monthly, quarterly, simi annually, annually
Term insurance coverage protects you the month you pay the premium
Term insurance has riders that be added as extra benefit

Be sure to speak to a live representative when getting your insurance quote. I will be emailing everyone on my list my "Term Shoppers Cheat Sheet" which will tell you how to by the cheapest term from a top rated insurance customer. As a bonus I will also be adding my secrets to having you insurance pay for itself.