Term insurance policies offer coverage for a predetermined period of time, which makes them more affordable than whole life insurance policies. This is because the insurer takes on less risk, as the policy expires if the insured outlives the term. Here is a comparison of the average annual cost for a $500,000 whole life policy and a $500,000 20-year term life policy for a healthy 40-year-old:
|Type of Policy||Average Annual Cost|
|Whole life insurance||$6,560|
|20-year term life insurance||$311|
Term life insurance policies offer flexibility in choosing the coverage period, which can range from one to thirty years. You can select a policy that covers short-term debts or expenses, such as a child’s tuition, or opt for a longer-term policy to cover a mortgage. This makes term insurance a great choice for young families looking for temporary coverage.
Term life insurance is easy to understand and simple to shop for. You only need to make three main decisions: how much coverage you need, how long you want the coverage to last, and which insurer you want to do business with. Once you have made your choices, compare quotes to find the right coverage for you and your family.
In conclusion, the main advantage of term insurance is that it provides affordable coverage for a predetermined period of time, making it a good choice for young families or those with short-term financial obligations.
- MarketWatch. The Benefits Of Term Life Insurance In 2023 - Marketwatch
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- Investopedia. Term Life Insurance: What It Is, Different Types, Pros And ...
- ICICI Prudential Life Insurance Company Limited. Top 7 Benefits Of Term Insurance
- The Economic Times. Advantage Of Term Insurance Over Other Types Of Life ...