Term Life Insurance

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What is term life insurance?
Term life insurance provides coverage for the beneficiaries in the event of death of the insured. Also called term assurance, term life insurance premiums are payed at a fixed rate for a limited period of time. Many financial advisers commonly recommend term life insurance until such time that there are adequate funds available from savings to cover heirs in which the term life insurance payout would cover. In this video, David Ramsey, a nationally syndicated financial adviser and radio program host, gives a strong argument in favor of term life insurance.

Life insurance, no matter what type, is designed to replace the lost income of a family member in the event of a death or debilitating injury. However, millions of families do not any kind of assurance plan.

Employer provided life insurance
Many companies provide life insurance for their employees, but it’s often not a sufficient amount of coverage. Employer provided life insurance if typically no more than a year or two worth of salary. In general, a household should have 8-10 times their income in guaranteed term life insurance. Other points to consider include:

• Will your life insurance expire upon retirement?
• If you are fired will your life insurance become void?
• Is your life insurance policy directly tied to your employer’s business and if so, what happens if the company fails?

The percentage of U.S. households with life insurance coverage is at its lowest in 50 years, leaving millions of families without a safety net, according to a recent survey by LIMRA. The economic downturn in recent years has led to an industry wide outreach program throughout the life insurance industry like the ability to shop for life insurance online. The adaptation of online life insurance shopping has given purchasers a significant advantage in finding custom insurance policies specific to their needs.

Why does anyone need life insurance?
At the beginning of one