Buying a term life insurance policy is an affordable alternative to costly permanent life insurance. There are many benefits to purchasing a term life insurance policy, including simplicity and flexibility, as well as the financial protection of your loved ones.  Learn more about the benefits of term life insurance by reading this article.

Term Life Insurance Policy vs. Whole Life Insurance Policy

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 polices are simple to understand, and allow for personal choice. You pay a low 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 expensive, due mainly to its investment aspect, while a term life insurance policy is 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 cost consumers.

Term Life Insurance Policy Rates

To be considered for preferred or low term life insurance policy rates, it is important to keep your height to weight ratio at or near the normal range for your body type.  If you have lost weight and kept it off, be sure to let your term life insurance company know.  If they won’t lower your rates (after proving your weight loss), it might be time to shop around for a new term life insurance policy that will offer you lower rates.

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–which is what happens with whole life insurance.  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 for you.  Instead, buy a more affordable term life insurance policy and invest the money you saved yourself.

A term life insurance policy is good for short term needs.  Two good examples of this are to cover your children’s college education and to cover your mortgage.  Parents could 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 could 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 needs–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 lie on your policy—life insurance companies will investigate before paying.  If you do not admit to habits, hobbies or health risks on your application, your policy may be considered invalid and your beneficiaries may not receive the money after you pass away.