How to Get Most from Life Insurance for 20 Years Term
While going for insurance policies, many people get confused with the two kinds of policies known as "whole life" and "term life" insurances. Many people are not clear about their differences. Let us first of all try to understand what is "term life" insurance? It can vary between the periods from 5 to 30 years, when it will be in force. Let us take life insurance 20 year term as an example. This term will continue for the period of 20 years. Some of that term are valid for one year only, however, majority of them are 10, 20 or 30 years term policies.
Another thing about the "term insurance" is that in this insu policy, no investment components is attached with it. This component is present if you buy any "whole life" insu cover.
Therefore, if you compare the premiums of any 20 years term life with whole life of the same value of insurance, you will find plenty of difference in their premium. Term insurance is cheaper way to get you insured for any fixed amount of time.
In the premium charged for your life insurance for 20 years term there will be no component available, which can be called as investment component and neither there is any estate tax component. In case, you want to buy 20 years term life insurance policy, then you will remain fully insured for the period of 20 years from the date of buying your insurance policy. In case, you die within this period then your beneficiary will get the full death benefit, which is determined when you buy your policy.
On maturity you will not get anything from the insurer.
In fact, term insurance policy can be bought by anybody. Many people consider this insurance, as bread winner of the family because in case the family's bread earner dies, then his family will get the death benefit, which is supposed to provide the basic needs on his behalf. However, that may only take care to certain extent.
Life insurance for 20 years term has a lot of advantages. The assured death benefits of the policy are exempted from federal income tax. There is an option to renew at the 21styear, without providing any proof of good health. The policy holder can convert pure insurance policy protection to a whole life insurance, which not only builds cash value, but eventually will earn rich dividends too.
People usually buy term insurance to cover following eventualities:
To get funeral expenses of the insured person
To clear the mortgage and other debts
To compensate for the loss of income of the sole bread earner.
To ensure the school and college fees of the children
Everyone may not qualify for all of the above benefits, due to their age or heath condition. Therefore, 20 year term life insurance must be purchased at younger age to get most of the benefit.
Another thing about the "term insurance" is that in this insu policy, no investment components is attached with it. This component is present if you buy any "whole life" insu cover.
Therefore, if you compare the premiums of any 20 years term life with whole life of the same value of insurance, you will find plenty of difference in their premium. Term insurance is cheaper way to get you insured for any fixed amount of time.
In the premium charged for your life insurance for 20 years term there will be no component available, which can be called as investment component and neither there is any estate tax component. In case, you want to buy 20 years term life insurance policy, then you will remain fully insured for the period of 20 years from the date of buying your insurance policy. In case, you die within this period then your beneficiary will get the full death benefit, which is determined when you buy your policy.
On maturity you will not get anything from the insurer.
In fact, term insurance policy can be bought by anybody. Many people consider this insurance, as bread winner of the family because in case the family's bread earner dies, then his family will get the death benefit, which is supposed to provide the basic needs on his behalf. However, that may only take care to certain extent.
Life insurance for 20 years term has a lot of advantages. The assured death benefits of the policy are exempted from federal income tax. There is an option to renew at the 21styear, without providing any proof of good health. The policy holder can convert pure insurance policy protection to a whole life insurance, which not only builds cash value, but eventually will earn rich dividends too.
People usually buy term insurance to cover following eventualities:
To get funeral expenses of the insured person
To clear the mortgage and other debts
To compensate for the loss of income of the sole bread earner.
To ensure the school and college fees of the children
Everyone may not qualify for all of the above benefits, due to their age or heath condition. Therefore, 20 year term life insurance must be purchased at younger age to get most of the benefit.
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