Securing a 5 year term life insurance policy will give you the ability to purchase low cost insurance that provides a sizable payout. You can purchase this type of insurance in a number of different terms, including one year, ten year, up to twenty or thirty year policies. One of the most popular is a 20 year term life. You can select the amount of insurance that is right for you, and secure the help you and your family need in an untimely death. Like all insurance products, you should take the time to look for the best options available to you and consider various types of insurance before selecting one over the other.
Term life insurance is a type of life insurance product that is in place for a specific amount of time. Unlike other policies such as permanent life insurance or whole life insurance, term stops after a certain amount of time. In this case, it would be five years. If you were to die during that term, the life insurance would pay out the face value of the policy to your beneficiaries. This means that it would pay the amount of money you had purchased in insurance to those you list on the policy to receive it. You have the ability to name anyone as your beneficiary you select.
When purchasing a 5 year term life insurance policy, you will likely find that one of the largest advantages of this type of policy is the low premium. A premium is the amount of money will pay over the lifetime of the policy. Usually, premiums are paid each year as an annual premium payment. Some policies allow you to purchase on a monthly basis, or to make payments each month rather than one large payment at the end of the year. When purchasing these, it is essential to consider what exactly your premium is being used for.
With term life insurance, the policy does not build up any cash value. At the end of the five year term, the policy is over and there is no longer anything owed to you or to your beneficiaries if you die. Many times, you can renew the policy or even convert term life insurance to whole life insurance. Policies like whole life insurance and permanent life insurance build up cash value over time. Many people find the advantage of this is that they get to build up a retirement account and even borrow from the cash value of the policy over the lifetime of the policy.
There are many benefits to term insurance though, including the fact that you can purchase the insurance for a much lower cost than other policies. These policies work well for those that are seeking a one time payout on their death and want to protect their family from living without their income. For example, if you purchase an insurance policy like this, you may be wanting to secure you family will be able to pay for your child’s education in college if you were to die before you could make these payments yourself.
Like with any type of insurance policy, there is no way to know if you will need these funds. They help to protect your family from the many what if situations that can happen at any time. For many people, this reassurance is an important part of caring for their family. Life insurance is an important part of managing your financial security and term life does work well for many people. Do consider whole life versus term life, too. Talk with your insurance provider to determine which type of insurance is right for you and to get an accurate pricing for your particular situation.