Principal, LifeNet Insurance Solutions, Redmond, WA
By far the major advantage of term life insurance is cost. These policies are designed to protect the beneficiaries for a period of time, the longer the period, the higher the premium. Most term policies are convertible into "permanent" coverage. Some carriers will allow conversion into any permanent product they offer, while others severely limit your choices.
The disadvantage of term is that many people choose inadequate time periods and concentrate on immediate cost versus longer term family needs.
As Lenny said, the biggest advantage of Term life insurance is it's relatively low cost (although this is not always the case). Another advantage is that it is a simple product, with few bells and whistles, so less complicated to buy than some permanent policies. It is a good choice for those who need life insurance for a set period of time and don't care about cash value.
The biggest disadvantage of term is that the cost will jump very high after the term ends. Another disadvantage is, if you miss two monthly payments, you will need to qualify medically to get your policy back. Some people find it a disadvantage to have to make regular payments, as you cannot pay it off ahead of time, as you can with Universal or Whole Life.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
I disagree. It is the most expensive form of life insurance. Its advantage is price. The initial price cheaper because it only covers a specified number of years. The longer the term, the higher the price. By extension a permanent policy is one with unlimited term and is actually less expensive to purchase if you require coverage for a lifetime.
This is a great question! I'll give you the two minute breakdown, but if you'd like a longer version, please feel free to look up my Facebook page, Winkler Financial Group, and scroll back a week or so, where we discussed life insurance types, and their pro's and cons. Term is cheap. (pro) Then it ends. (con) If you wish for it to continue, it becomes prohibitively expensive horribly fast. (con) It is perfect for protection from a short term debt, that allows for cancellation of the policy when the debt is paid. (pro) It has no perks, cash value, or extras. (con). That's a quick look, and I hope that it helps. Thanks for asking!
.JPG){kind=avatar}
The disadvantage of term is that many people choose inadequate time periods and concentrate on immediate cost versus longer term family needs.
The biggest disadvantage of term is that the cost will jump very high after the term ends. Another disadvantage is, if you miss two monthly payments, you will need to qualify medically to get your policy back. Some people find it a disadvantage to have to make regular payments, as you cannot pay it off ahead of time, as you can with Universal or Whole Life.