Comparing whole life insurance and term life insurance you will quickly notice term life is easier to understand. At least for the initial period of time, term life is also much easier on the budget. The length of time covered by a term life policy ranges from one to thirty years. This insurance is simple as it carries only a death benefit. There are no cash accrual or tax benefits and if you survive the term of the policy, the coverage ends unless you can renew or convert the policy.
Who should opt for term life insurance?
Columbia term life insurance coverage is an excellent choice for:
- Someone who needs temporary insurance only and has no interest in a long term whole life policy
- Someone who wants a significant death benefit to protect his family but has a limited budget
- Someone with a specific need that will exist only for a limited time
Young, healthy consumers are well suited to the benefits offered by term life insurance. Their financial resources may be limited but they need life insurance. For them, term life policies offer an affordable solution.
What are the benefits?
Term life insurance is an attraction option for many people. Though it differs substantially from whole life insurance, term life has its own benefits.
- Low premiums make term life available for consumers with limited budgets
- Insurance companies may offer the option to change the policy when the term is completed. You may buy a term life insurance policy now when cash is scarce and convert it to a whole life policy when your finances improve. The option to convert to a whole life policy does not commonly carry a requirement for another medical examination.
- In most cases, death benefits are exempt from taxes
What are the drawbacks of term life insurance?
- If you need to renew a term life insurance policy you may be charged significantly higher premiums as you grow older
- There is no cash value or tax benefits associated with term life insurance
- When the terms expires there is no value received for the policy
- If you health deteriorates during the term it may be difficult or impossible to qualify for a new life insurance policy after the term life insurance expires
See how easy it is to shop online for life insurance. Get your free Columbia life insurance quotes today!
