Guaranteed Term Life Insurance – Benefits, Questions To Ask Yourself, And Why It’s A Great Choice!
Guaranteed term life insurance is a form of life insurance that has a guaranteed fixed premium for the length of the term. The term length can be anywhere between 5 years to 30 years, or you can get an annual term insurance policy that you renew each year.
One of the great things about guaranteed term life insurance is that the rate is fixed for the whole term! So if you get a 20 year term, you’ll be paying the same thing in 20 years as you pay right now, even though you’ll most likely be making a lot more money in 20 years!
On the flip side, the negative about guaranteed term life insurance is that the premium is only guaranteed for the length of the term. Once the term is over your premium will most likely increase as you are now older. However you’ll also be making a lot more money, so you should be able to cover it just fine.
While considering what kind of guaranteed term life insurance policy to purchase, two of the major decisions you have to make are
1) What should be the length of the term?
2) How much coverage should the policy provide?
For guaranteed term life insurance, the first question is actually easier to answer than you may think. Most people purchase term life insurance just long enough to cover any major expenses they will incur in the short term.
For example, if your mortgage has 20 years left on it, or your children have another 20 years until they can be fully independent, a 20 year term is probably a good choice.
On the other hand, if you’re a little older and your kids will be out in 5 years, then a 5 year term is probably fine (unless of course you want to provide them with a windfall even after they’re independent, or want to take care of your spouse after you’re gone.)
As far as the second question, the easiest way to calculate the coverage would be
Number of years the money will have to last X your annual income
While this is very quick and easy, its not the most accurate. Taking into account the taxes you pay, as well as all the money you spend on your food, gas, etc. your family will most likely not need the full amount calculated above. But that is a good starting point. There are also calculators out there that can help you determine what’s right for you.
Choosing a guaranteed term life insurance policy is never easy. The good news is that if you do your research and think about what your family will need the money for in case you pass on, you can rest easy knowing that you did your best.
Justin has been working in the life insurance industry for 12 years, and has put together a site with more information Here. If you’re at all confused about life insurance, check out his site at http://www.toptermlifeinsurance.com
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