About Term Life Insurance Policy

This article is being written by an independent agent that has been in the life space as a specialist for 28 years. His credentials are bar none given his success and client testimonials. With that said, all bread winners need term insurance if their income is to be protected. Additionally, if there is debt and college funds needed then this must be factored into the equation as well.
Term insurance is the most cost effective product in the life insurance industry. Term life insurance covers you for a guaranteed set period of time in the event of an unexpected death. You can purchase anywhere from a one year term insurance contract to an age 121 guaranteed premium life insurance contract. Most importantly, the formula that most use to determine your life insurance need to simply take you income and divide that by a conservative interest rate and the number will be what is needed in a lump sum pay out to spin the income off in order for your loved ones to sustain their current lifestyle. For example, $100,000 income divided by a 5 %(.05) Interest rate equals a $2,000,000 term insurance need. The key is that you never have to invade principal and draw that down as eventually you will bankrupt yourself. With people living longer and longer due to medical technology break through, term insurance is a very important piece of your financial foundation. A great feature in a life insurance contract is the conversion privilege. Every carrier has an age cutoff given this feature. The following will give you a better understanding of this free benefit.
It is the right of a policyholder to convert without a physical examination to furnish evidence of insurability. Many life insurance policies can be converted to a permanent (universal or whole life) policy at the insured's attained age, with no physical examination required. Essentially, conversion locks in your health today until the end of the conversion period.
Again, it is a very valuable feature if you are a bad "health" risk in light of an underwriter's viewpoint!
To conclude, the three most important factors in covering your personal need in the event of an unexpected death is income replacement, debt and college funding. Term insurance is also widely used in many business situations to ensure monies are available in a key person situation if a key person should pass and buys sell arrangement if a partner should pass.