Buying Term Life Insurance

For many individuals, buying term life insurance is the best way to provide financial protection to their families in the event of an untimely death. People who are financially responsible understand that a loss of income can be devastating to those left behind. A life insurance policy provides the funds needed to pay for funeral expenses, outstanding debt, and continued household expenses. The proceeds from the policy can also be invested to provide ongoing income to a family when the breadwinner has died. This can be a very difficult subject for many families, but it's very important to discuss the family finances and to make responsible decisions regarding life insurance policies. Just think of an average family where the husband works full-time and the wife works part-time while the two children are in school. If the husband dies, the mom is left alone to raise the kids. She might not be able to make ends meet on her part-time salary. Of course, the wife can get a full-time job, but that means expensive child care bills. The wife may be forced to sell the family home and to make other very difficult decisions to take care of her children. But if the husband has an adequate policy, the wife has more of an economic cushion when it comes to making decisions. Perhaps she's able to pay off the entire mortgage on the home. It may be that money can be put aside for the children's college educations. Financial worry can be alleviated by buying term life insurance for the family's breadwinner.

However, it's not only the primary breadwinner that should have this type of coverage. Even a stay-at-home parent should look into buying term life insurance to cover final expenses. Proceeds from a policy can go toward paying final medical bills and the funeral costs. Additionally, the individual may have outstanding debts that can be covered by a policy. Even more important, though, is that a stay-at-home parent provides an economic benefit to a family that is lost when death occurs. Too often, people overlook the economic contribution of having someone at home caring for the children, preparing meals, and taking care of the home. But when that individual dies, someone is still needed for these responsibilities. The surviving parent may have to hire assistance in different areas. Here again, the proceeds from a policy can be beneficial to helping the surviving parent get through a very difficult and tragic time. At least, finances will not be an issue when the family did the responsible thing by buying term life insurance, not just for the family breadwinner, but also when a parent's economic contribution isn't as obvious as a weekly paycheck. As difficult as it is to talk about, no one escapes death. As King Solomon wrote: "To every thing there is a season, and a time to every purpose under the heaven: A time to be born, and a time to die; a time to plant, and a time to pluck up that which is planted" (Ecclesiastes 3:1-2).

Basically speaking, a term life policy provides financial protection in the event of the policy-holder's death. The policy is purchased for a set amount of time and the premiums remain the same during that term. For example, a person buying term life insurance might opt for an annual policy that can be renewed each year at a higher premium. Or the policy might be set for longer periods of time, for example, five, ten, or even thirty years. The premium starts out higher than for an annual policy, but remains the same for the entire term of the policy. The premiums for these types of policies are relatively inexpensive when compared to whole-life policies. For example, a young adult can purchase a significant amount of term insurance for a lot less than the same coverage in a whole-life policy. The whole-life policy has the advantage of the premiums staying the same over one's lifetime. It's much less expensive to buy one of these policies as a young adult than as a middle-aged adult. Yet the premiums are still higher than for term policies because of the added investment component and potential cash build-up of a whole-life policy. People who sell these policies promote both the investment and cash build-up as benefits to the policyholders. Yet there are much better investment opportunities and better ways to save cash. Many financial experts don't see whole-life policies as a good choice for most families and recommend buying term life insurance instead.

There are many financial companies that sell policies. Before buying term life insurance, potential applicants are advised to research the financial stability of the insurer. Just as there are credit reporting agencies that provide creditworthiness reports on individuals, there are also credit rating agencies that report on these various financial companies. A potential applicant can find a great deal of information just by doing a simple internet search and finding out the grade that a particular company has received from one of these credit rating agencies. Financial experts suggest that insurance purchasers select a company that is graded A or better. The top-notch companies are graded AAA. The grades are often provided at no cost, but more detailed reports may cost a nominal fee. Providing for one's family is an essential responsibility that can be taken care of by researching and buying term life insurance from a reputable company.

Group Term Insurance

Many businesses and places of employment offer group term insurance. The policies offered are basically like a plan under which several people are covered with one contract. This type of insurance is usually provided by a business or company with the purpose of having the ability to provide employees with adequate coverage. There are many advantages to those who choose to take part in a group plan, and many who would not otherwise be able to afford coverage can reap the benefits as well. The policies can go long way towards providing employees with peace of mind that can prove to be valuable, "I will both lay me down in peace, and sleep: for thou, LORD, only makest me dwell in safety" (Psalm 4:8).

Most companies that offer group term insurance offer the coverage as part of a comprehensive package that is made available to each and every employee. There are several benefits to such a plan. Many people choose to take advantage of the program for the express purpose of being able to have cheap coverage that is not only affordable but convenient. Those who have the option to take part in a plan should do so for the express purpose that the plans offered costs less than is usually required for an individual plan. The majority of employees who take advantage of the service are those who would otherwise be uninsurable based on various reasons. Unfortunately there can be a wide array of pre-existing conditions that either prevent people from being accepted by most insurance companies, or only be offered plans that are very expensive. Group term insurance provides for some people, the only way of obtaining coverage.

There are several differences to a group term insurance plan as opposed to a privately held policy. First of all, the boss, supervisor, or head of a company is the person who holds the policy. The actual policy is considered to be the master contract from which all actions are taken. All employees covered under the contract receive certificates that state they are covered under the plan. The certificates serve as proof of insurance; they are not a copy of the actual policy, but the proof of coverage that is necessary for people to posses in order to receive the benefits. Another difference with the form of coverage is the fact that individuals are able to choose their own beneficiary. A beneficiary is the person, group or organization that is to receive the benefits from a person's life insurance policy at the time of the holder's death.

There are many benefits available to those who decided to take part in group term insurance. One of the major benefits is that people under the plan do not have to pay for the premiums. The company that offers the plan takes care of most and in some cases all of the premiums, which can end up saving employees a lot of money. The amount offered in coverage usually equals to at least double of an employee's annual salary. The coverage is also one of the most common and popular, and has the added benefit of automatically renewing on a yearly basis, as long as a person stays with the company that offers the plan. In fact, the plan is designed to stay intact until an employee decided to terminate their contract with the company, group or organization through which they are employed. In the event that a person decides to leave they are commonly offered the option of having the coverage converted into an individual plan; however the process is often as the premiums rise significantly as a result of the conversion process.

Studies have been conducted that have shown that over have of people living in the United States do not have a life insurance policy. Many people might not think that one is necessary, or perhaps the thought of dying never enters their minds. However, no one can predict the future and those who wish to leave enough funds for family and loved ones should look into the types of policies that are available to them. A group term insurance plan allows those covered a lot of flexibility in various programs. Every person is different with individual needs, and the ability to be able to specifically decide what is required and what can be very helpful. The fact that the policy continues indefinitely can help to provide people with a much needed peace of mind that comes with not having to worry or fret over unforeseen situations.

Several different options can be offered under one policy. For example, some companies offer plans that included accidental death or dismemberment coverage in order to provide additional financial protection in the event that a person suffers from a tragic circumstance. Many employees covered under group term insurance policies have families or people who rely on them to provide. Occasionally, insurance policies include options that allow those covered to extend the coverage to any dependents that might be in need. In addition to complete coverage under a group plan, many companies offer individual policies as well so that employees have the option to cover all bases.

People who are in the need of effective and trusted life insurance policies should begin by inquiring into plans offered by places of employment. Group term insurance is intended to provide employees with the necessary coverage and allows access to a wide array of options and benefits. For those who are in the market for individual polices, employers might also have programs to fit the needs, however people can also choose to contact a professional in the field. The internet is a good source of information for those who might perhaps have questions, and several web sites offer ways in which professionals can be reached who have the ability to offer guidance towards the right plans for individual needs.

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