Saturday, August 15, 2009

Term Life Insurance

Term life insurance, one of many forms of life insurance, is popular due to its simplicity. While other forms of life insurance in the United States require complicated calculations of premiums and rates, this type of insurance is perfect for individuals who do not wish to look ahead to the future. However, many individuals who select this form of insurance do not make as much money as those who choose something else.

Most life insurance policies are universal or permanent. Because the coverage is life-long, the insurance companies must always pay out. These policies require higher premium payments upfront due to the fact that the life insurance plan will pay out eventually. Term life insurance policies, however, are not guaranteed to pay out since they are only good for a fixed time period. These life insurance plans often expire before the individual dies, meaning the client did not gain any returns on his or her investment. Because companies may not have to pay out, premiums for these policies are lower. For the client, an expired plan will have to be renewed in order to prevent a gap in coverage, often at a higher rate than the original policy. You may also be eligible for some tax cuts. Calculate how term life insurance affects your taxes with tax calculator.