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What is term life insurance?

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Term life insurance can be an affordable way to protect your loved ones in the event of your death. Term life insurance coverage can provide money to your family members to pay bills, education expenses, and other costs that are currently paid for with the money you earn now. Often, these bills have to be paid in order for your family to keep up the quality of life they currently have. Because of this, choosing your life insurance terms is one of the most important decisions you can make for your family.
A term life policy will pay a policy holder’s family a lump sum amount upon their death. When shopping for such a policy many people find a variety of options in how much this amount can be. Some policies are designed to pay out a small amount of money, typically meant to help a person’s survivors pay for their funeral expenses. These policies are generally recommended to people who do not have to financially support anyone else. Larger payout amounts are recommended for people with dependents who need their financial support.
Determining how much life insurance to purchase can be tricky. The general advice given to people in the market for life insurance is that they buy enough so that their dependents can cover their necessary bills indefinitely. In order to quickly estimate this amount, start by adding up your family’s annual expenses. Then, multiply this number by twenty. The result is the minimum recommended amount of life insurance for your family.
Most people purchase a term life insurance policy for a pre-set amount of time. In other words, these policies are usually not written to protect a policy holder’s family for their lifetime, but rather a predetermined amount of time at the end of which the policy expires. The length of the policy is a life insurance term that can be negotiated.
It is very important to choose a policy term length that will last at least until your dependents no longer need your support. For many parents of minor children, this means having term life insurance coverage on both parents until all of their children have graduated college and are living on their own.
If you are currently shopping for insurance, most financial advisors recommend that you get several different insurance quotes. Fortunately, this is not as time consuming as it may seem at first. Many insurance companies give out their life insurance premium prices over the phone or internet. In order to do this, however, you will need to give the insurance agent some basic facts about your age, health condition, and living situation. Getting good quotes usually only takes a few minutes.
Many people in the market for this valuable coverage are surprised at how affordable this type of insurance is. In fact, prices for term life coverage have been decreasing throughout the past twenty years, due to increased life expectancy and competition within the industry. Be sure to research this important coverage in order to make sure that you make the right decision for your family.

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