Benefits of a Term Life Insurance Policy

Buying a term life insurance policy is an affordable alternative to costly permanent life insurance. But affordability isn't the only advantage. Term life insurance policies are also flexible, easy to understand, and easy to buy.

Term Life Insurance Policies vs. Whole Life Insurance Policies

There are two basic types of life insurance: term life insurance, where you choose the coverage amount and length of the policy, and whole or permanent life insurance, which combines an investment product with life insurance.

Term Life Insurance Policy Advantages

Term life insurance policies are easy to understand. You pay a low, fixed monthly premium based on the term life insurance policy term length and amount of coverage you choose. You can choose term lengths such as 10, 20 or 30 years, and life insurance coverage amounts anywhere from $100,000 to several million dollars.

Whole life insurance is often expensive, due mainly to its investment aspect, while a term life insurance policy is usually very affordable. Whole life insurance policies often cost thousands of dollars a year, as opposed to the mere hundreds of dollars a year that the majority of term life insurance policies run.

Invest Your Money How You Want

With a term life insurance policy, you can invest your hard-earned money yourself, rather than having an insurance company do it for you. Life insurance companies are often very conservative with how they invest your money. If you are at all savvy in investing, or good at saving, the extra money a whole life insurance policy costs may not be worth it. Instead, buy a more affordable term life insurance policy and invest the money you saved yourself.

Cover Your Short Term Needs

A term life insurance policy is great for covering your short-term financial needs in case of your passing. Two good examples of these needs are your children's college education and your mortgage. Parents can buy a term life insurance policy that expires after their children graduate from college to ensure that the full education is paid for. Or, the main breadwinner in a house can buy a term life insurance policy that matches the length of his or her home's loan to protect their mortgage.

Additional Term Life Insurance Policy Tips

Here's a crucial tip: Life insurance is not the place to skimp. Make certain to buy enough term life insurance to meet your needs. Also, match the term length to your personal situation - 30 years to cover the life of the mortgage, for instance. Make sure your dependents are covered until they can provide for themselves, or that your spouse is covered until retirement income becomes available. Buy when you are healthy, and try to match your terms to when you will still be healthy. When you get into your 50s and 60s, it may be harder to find affordable term life insurance.

Don't ever lie on your policy — life insurance companies will investigate before paying. If you do not admit to risky habits, hobbies or health issues on your application, your policy may be considered invalid and your beneficiaries may not receive any money after you pass away.

Take the time to compare term life insurance quotes at InsWeb and find an affordable term life insurance policy.