AFFORDABLE TERM LIFE INSURANCE QUOTES

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Understanding Affordable Term Life Insurance


There are many commercials that pop up on television and radio promoting the value of getting an affordable term life insurance quotes. Now, most people have a clear understanding of what a term life insurance quote entails. However, they may be unaware what the concept of term life insurance centers on. For those that may have a number of questions regarding this form of coverage, the following is a brief overview of what it entails.


As with other forms of life insurance, term life insurance centers on offering a “death benefit.” That is, when the insured dies the beneficiaries will be paid a settlement amount based on the amount of coverage that the insured purchased. Again, this is standard with all life insurance policies. However, term life insurance is different in one respect. Specifically, term life insurance only provides coverage for a certain designated period of time. This timeframe is, of course, the term mentioned in the title of the coverage.


In short, the coverage is purchased for a specified term. When the term expires, the insured has the option of purchasing a new policy. In some instances, it may be the exact same policy at the same price. In other instances, it could be a new policy at an increased price or different terms. And, of course, the insured could also downgrade the policy for a lower premium. Really, this is the major benefit of purchasing a term life insurance policy. A person can save a lot of money on the purchase of a policy since the policies are being purchased in fixed terms.


This makes term life insurance perfect for those that may be on a proverbial budget. Anyone looking to make sure their family is properly covered in the advent of an emergency can take out a short term policy at a reasonable cost. That alone is a huge endorsement for term life insurance.

Understand Term Life Insurance Beneficiaries

A key consideration of term life insurance policies is designating the policy beneficiaries. Let's first understand what the term means and dig a little deeper into choosing your beneficiaries.

It's always good to start with the official definition:

An individual, institution, trustee or estate which receives, or may become eligible to receive, benefits under a will, insurance policy, retirement plan, annuity, trust or other contract upon the death of a certain person.

Now that we have that out of the way...a beneficiary is essentially the person who will receive money when the benefits are triggered. In most cases, this is a spouse, children, or other family members.
It's the person or entity you list in the term life insurance plan to receive the death benefit.

It can be:
one person
two or more people
trustee or trust you have already established
a charity
your estate.
Primary and Secondary or Contingent Beneficiaries

There's usually a pecking order to the list of beneficiaries. The life benefits will be paid to the primary beneficiary if available and possible. Otherwise, the policy will usually pay out to the secondary or contingent beneficiary. It's possible to designate more than one person as the primary beneficiary with some sort of percentage split among them.

In most cases, the beneficiary is pretty self-explanatory but you want to make sure to be clear. For example, you would not want to list "spouse" as the beneficiary. It's better to use the spouse's name and even SS# otherwise, ex-spouses might lay claim to the benefit and this result in disputes, which is the last thing you intended. Clear and precise is the rule of order when choosing beneficiaries. You can make changes to this area but it's best to change it immediately or better yet, designate it correctly from the beginning to avoid potential disputes and issues. It makes sense to specifically name someone if that's your intent to avoid the delay and cost of probate (where benefits go through the estate instead of direct to a person).

Clarity in how the benefits is to be paid to beneficiaries is also extremely important with term life insurance policies. For example, if you have three children and designate an equal amount to each, what happens if one deceases before you or cannot be found? Specify exactly how this type of situation would be handled so there's no confusing. Wills are not a substitute for properly naming your term life beneficiary as wills traditionally deal only with estate issues (probate). Probate is subject to taxes and creditors so it's important to name a person's name directly as a beneficiary to avoid this.

Try not to use exact dollars as the amounts can become outdated. Percentages stay true regardless. Try not to use your estate as the beneficiary as that opens up your life benefit to probate, taxes, etc. One of the great benefits of life insurance if the beneficiaries are properly listed is that it avoids the issues associated with estates. In some states, listing minors as beneficiaries can pose problems since they may be required to have a legal guardian appointed by the court to manage their money.

About the Author:
Dennis Jarvis is a licensed insurance agent concentrating on term life insurance. Shop, compare, and instantly quote multiple carriers with professional guidance and resources.

Author: Dennis Jarvis
AFFORDABLE TERM LIFE INSURANCE QUOTES