Low Cost Term Life Insurance Information

Life insurance is absolutely essential for any family with children as it helps safeguard them against a situation where they’ve lost a parent and been thrown into unbelievable financial hardship. For those parents planning ahead, low cost term life insurance is a great option and it is often at the top of the list of options when people are looking to purchase life insurance.

Term life insurance is really quite simple to understand: you enter into a contract with an insurance company for a set amount of time, known as a “term”. This is usually 10, 20 or 30 years, though it could be any number of years in practical terms. You purchase a set amount of life insurance, and that is usually referred to as a “face value” or death benefit. You usually see this stated as “$500,000 of life insurance” or $600,000, etc. It can be in any increment the insurance company is willing to sell you. You pay an amount of money known as a premium each year to keep the policy active and in full force.

With low cost term life insurance, the premiums are really quite low. A health 30 year old can expect to pay about $500 a year to keep a $500,000 policy active. This means that you just pay $500 a year and if you happen to die during that next 30 years your family will be paid $500,000 in cash (that often isn’t taxed). This is a really good deal, and even though it’s morbid to think about, it’s really not responsible at all to not look into this.

There are a few types of term life insurance such as joint term life insurance where two people are on one policy and if one of them dies the death benefit is paid out to the survivor. There is also return of premium term life insurance which costs more than traditional term insurance, but if you do not die during the 30 year period you get to keep 100% of the premiums you paid. These are all reasonable options and should be discussed with your insurance broker.