The Uses of Term Life Insurance

By Compuquotes Team on August 14th, 2008

While all forms of life insurance have their own uses, not all life insurance is made alike, and some kinds of life insurance are better for some cases than others. Whole life insurance, for example, is usually for a smaller amount of money, and will protect the insured for their entire lifetime. This kind of money tends to go toward final expenses, and not a lot is left over for other things.

If you are interested in a larger amount of money for a particular reason, then you are actually looking for term life insurance. Term life insurance is a special kind of life insurance which is designed to sustain a much higher potential payout for a shorter period of time. The hope of the insurance company is that they will never have to pay you, unlike your whole life insurance, which the company can only hope you pay for yourself over the lifetime of the policy.

Term life insurance is very helpful if you are about to make a large change in your life, from buying a home or a car to having a baby or getting married. It allows you to leave more behind should you die before your debt is paid off, so if you buy a home for $300,000, then you may want to get a term life insurance policy that will cover the length of time that you are in debt (usually 30 years), and that will allow your loved ones to pay off that mortgage after you are gone, hopefully with enough left over to take care of other expenses.

The same goes for other kinds of debt as well; a term life insurance policy that covers you for the life of the debt will allow you to rest assured that if something happens, your loved ones will not be buried by payments on your new car, etc. This assurance is very necessary to many people, and can also be very important to the family that you leave behind.

Having a family can also be a reason to consider a term life insurance policy. This kind of policy will allow you to insure yourself for the amount necessary to cover the expenses of your children including everything from daycare to school supplies until they are 18. Since this can be hundreds of thousands of dollars, this policy becomes very important, particularly since term life insurance for healthy young people is actually very affordable, even for hundreds of thousands of dollars.

If you are looking for life insurance to cover things like debts and your family after you are gone, then term life insurance is the thing for you. It is cheaper than whole life insurance because of the term stipulation, and can be an incredible help for your family should anything happen to you. The first thing you should think of when you make a new, large purchase on credit, is that you should apply for term life insurance as soon as possible.

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