Term life insurance - a great deal?
Term insurance can be a great deal — depending on your point of view — it’s great for the insurance companies because fewer than 2% of term life insurance policies ever pay a death benefit. The great news is that you’re still alive! The bad news is, you don’t get that money back.
Term insurance allows you to have a larger death benefit for a lower premium than you could buy through a permanent insurance policy.
But the purchaser of term insurance should know that a term policy is not meant to be in force when the insured statistically will trigger the death benefit. For this reason, term policies are great when your circumstances are that you only need temporary coverage. This includes the income producing years of working people who have others in their life who depend on their income (generally referred to as an income replacement need), a debt obligation that is to be paid-off in a certain amount of time (mortgage protection, home equity or business loan pay-off, unexpected buy-out of a business-partner’s interest, and so on.)
Not all term life insurance policies offer the same benefits
For these reasons and others, term insurance can be a cost effective way to cover an economic loss, caused by someone’s death, where the risk or need is temporary, but the features and benefits in any particular product should be fully understood and compared to other company’s products before deciding to do an application with any particular company.
One major area often overlooked by inexperienced agents and their clients is — what other features and benefits [or the particular terms of a feature of benefit] that are in one company’s product, but not “similar” products from other companies. Said another way — not all policies are the same. Different products from different companies offer different things, and an experienced agent will be able to identify the differences and explain it all to you.
Also, your independent agent should be able to produce and review a VitalSignsⓇ comparison of the carriers he or she is recommending. In the hands of an experienced agent, the reports from the various carriers can help guide your decision to a company you think is most suitable for your goals.
An experienced independent agent can be a tremendous resource to you with regard to valuable information that may save you time and regret in the future.