Pros and cons of Term Life Insurance

Understanding the positives and negatives of different types of life insurance plans is crucial to helping you pick out the right plan for your life situation. Each type of life insurance is different and one may fit your lifestyle more than another.

Term life insurance is a type of life insurance that covers you for a certain amount of year, also known as the term year. If you pass away during the term years you are covered for then your loved ones will be paid. This type of life insurance is usually less expensive because you are just covering a certain amount of years and not your entire life. Term life insurance does not offer any cashback if you cancel the policy or live past the term years. The only cash that will be received is by your beneficiaries upon your death during the term years.

There are four reasons why term life insurance is a great option. First, it is a less expensive plan because it is only covering a certain amount of years. Second, it is not a rigid plan. It offers flexibility because you can decide to cover only one year or 30 years. Thirdly, term life insurance is great for young families since it is cheaper and flexible. Finally, term life insurance is a simple policy that makes it easy to understand and easy to choose a plan that fits your needs.

There are three reasons why term life insurance may not be the best option for you. First, it is a temporary plan. Since this life insurance covers a certain amount of time, it might not be good if you want whole life insurance. Second, you will have to re-quality for term life insurance once your term ends. This could change your plan if you have new health conditions. Your monthly premium could go up for this reason. Lastly, term life insurance does not have accumulative cash value, unlike some other plans. This could be a factor for why you don’t choose term life insurance.