TERM LIFE INSURANCE
Term Life insurance is an inexpensive insurance that can be used for people just starting out, Buy-Out Policies, Key Person Employee Policies, as part of a benefits package, and for Credit/Mortgage Protection. These policies do not build cash value and on average cannot be renewed past age 80 and the older you get the less the length you can get to make sure it ends at 80. Also, you pretty much have to be healthy to get these policies. These policies do not have the ability to have cash value but can have living benefits built into them. They cover you for a period of time and then end and unless you have a return of premium rider on the policy all the money you pay in you lose.
The first one we will talk about is for a young person just getting started out. These policies can be good because these clients are usually on a fixed budget and do not have much to devote to insurance. The expectation is that as these clients go along they will convert to a permanent policy.
The next to talk about is Credit Protection/Mortgage Protection. These policies are to cover a large debt, like a mortgage loan. The policy pays if something happens to the covered person then the policy pays the beneficiary at least part of the benefit to cover the loan amount at least for a period of time and if death is the result then pay off the loan altogether. This can provide peace of mind that this is taken care of and you are providing for your family in their time of need.
The rest of the term policies are for commercial purposes. A Buy-Out Policy is for business partners to where if one is injured or deceased it allows the rest of the partners to buy out the injured or deceased partners share so they do not have to work with the widow or children. It is important to have this policy in place in partnerships to protect the business and the partners from many legal and financial entanglements.
The next is the Key Person Life Policy. This covers key people in the company and pays the company if the key employee is injured or killed for the losses to the company by the loss of the employee.
The next is benefits package. In this the company may purchase on all employees or let the employees choose to purchase a term or permanent life policy. If the employees have the premiums deducted from their check then the rule is at least 70 % must enroll, if the employer pays the premium then 100% are required to enroll.