Why Buy Term Life Insurance?

• Term life insurance can help protect your home.new home image by steven Husk from Fotolia.com
  
  People purchase term life insurance for two primary purposes. The first is to protect dependent children in the event of the death of one or both of their parents. A 20-year term life insurance policy can provide funds for a college education, living expenses until the children are old enough to care for themselves or whatever needs the parent foresees for his children if he dies unexpectedly. In the same vein, the second reason for purchasing term life insurance is to protect a mortgage. For example, assume a couple purchases a $300,000 home with a 30-year mortgage. By purchasing a 30-year term policy with a $300,000 face value, the homeowners are protected if death occurs before the mortgage is paid off, thus protecting the spouse and any children from losing the home.
  
  

How Do Term Life and Whole Life Differ?

• Term and whole life insurance have several important differences. The first is price. Term life insurance is about the least expensive on the market. When you see commercials on television showcasing life insurance at less than $20 per month, that's what they're about. The premiums stay level for the duration of the term, and the policy dies when the term expires, unless the policy owner chooses to renew, usually at a much higher premium.
  
  The second difference between term and whole life insurance is that term insurance does not accrue a cash value. In essence, when you purchase term insurance, you're stamping an expiration date on yourself. Unless you die within the term, the policy will not pay out, and you won't own anything more at the end of the term than you did when it started. In other words, you're renting your insurance.
  
  Whole life insurance, by comparison, is more expensive because it accrues cash value, which means that at some point you can surrender the policy if you wish and get some money out of it without having to die.
  
  

How Do I Buy Term Life Insurance?

• An agent can save you time and money.Business Woman In The City 4 image by Ken Hurst from Fotolia.com
  
  The simplest way to buy term life insurance is through an agent. Insurance agencies that represent a wide variety of companies are readily found in the telephone book and online. Your agent will visit with you in person, discuss your needs and intentions, and help you find the product most suitable to your situation. A licensed, reputable agent will consider your budget, age, health and wishes, review the plans available and make recommendations accordingly. She will guide you through the application process, write and submit the application for you and keep you apprised of its approval status. The agent is also a go-between, giving you someone specific who will attend to your insurance needs and intercede with the insurance company on your behalf if you have questions or problems. A reputable agent will not push any product on you that is unsuitable, nor will she attempt to pressure you into purchasing a product that you don't want.
  
  

Can I Buy Insurance Without an Agent?

• An agent will do the work for you.man with briefcase image by Cora Reed from Fotolia.com
  
  You can buy term insurance online on your own, but working with a local agent has distinct advantages. Your agent has direct access to the insurance company or companies that he represents, and a large part of his responsibility is to do the comparison shopping and legwork for you. Also, unless you're extremely knowledgeable about life insurance products, their pricing and underwriting, it's very easy to find yourself paying more than you should. An agent has the knowledge and resources to find the right product for the lowest premium. Finally, if you have a question, an issue or a problem, you have an immediate, local advocate who has met and spoken with you face to face. When you use online customer service numbers, a representative will certainly help you. He knows nothing about you, however, nor do you know him. You'll also get a different representative every time you call, which makes it difficult to build a rapport. When you work with an agent directly, you build a relationship with that person that can endure for years.
  
  

How Much Does Term Life Cost?

• Term insurance is the least expensive insurance.Low Cost image by Marco from Fotolia.com
  
  Of all forms of insurance, term is the least expensive. Like all insurance policies, however, premium amounts for term life depend on how much insurance you buy, your age, health and other related factors. If you're a healthy male non-smoker in your late 30s, you can expect to pay between $20 to $50 per month for a $300,000, 20-year policy (in 2010). For a $100,000 policy, the premium is about 1/2 that pricing (in 2010). If you're female of the same age, your health is perfect and you don't smoke, your premiums will be a little less. As noted, an agent's responsibility is to compare companies and products to find the policy that is most suited both to your needs and budget.
  
  

Do I Pay the Agent?

• Checks for term life insurance are made out to the insurance company.signing check image by jovica antoski from Fotolia.com
  
  You pay the insurance company, not the agent. The agent receives a commission that is paid out the insurance company's portfolio. If you decide to purchase a policy, you will be asked either for a voided check in order to begin automatic monthly withdrawal payments, or, if you choose to pay your premium yearly, you will be asked for a check in the annual amount. The check always will be made out to the company, never to the agent.
  
  

Is Term Life Appropriate for Me?

• Term insurance can provide peace of mind.young family image by JulianMay.co.uk from Fotolia.com
  
  The final decision as to whether or not term life insurance is appropriate for you depends on you, on your goals and priorities. If your primary concern is protecting your children and/or your home for a specific period of time, if you're not concerned about being able to cash in the policy and you're not looking for something that will provide for your retirement, then term life insurance is a good option. It's inexpensive, effective for the purpose for which it was designed and can provide you some peace of mind while your children grow up, until your home is paid off or both.