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The debate between whole life insurance and Term life insurance has been on ever since the two were invented and came into vogue. The two have different sets of characteristics and may appeal to people based on a whole lot of factors. However, there is one more issue that needs to be fixed when it comes to term life insurance, which is all about setting the term in term life – how long should Term Insurance be?
To be sure, there is no easy answer to the question. The solution depends on your own individual circumstances, of course. However, there may be good reason why you should go for this type of insurance as such, which should perhaps guide you on deciding on the term of your insurance.These plans are suitable for those who would want to have a fixed term for their insurance, as the name would suggest. And when it comes to the reasons behind choosing a fixed term, they could be the financial situation of the insured, their future plans, their ability to invest, and their outlook to life.
Term life insurance could be taken anywhere from one year to ten, twenty, or thirty years. One of the chief considerations that people who take up to term plans would be affordability. With term insurance, the premiums paid tend to be much lower, since the term tends to be fixed. The insurance cover ceases to exist at the end of the term plan.
You could decide on the term by referring to your own unique situation. For instance, many people who invest in term life insurance project that they would be self-insured at the end of the period covered by their term plans. In other words, they may expect their income and their savings to reach levels that would be sufficient enough to cover their lives at the end of the term .
Sometimes, you may have to decide on when you may be able to afford a longer period of insurance cover. For instance, if you find that you would not want to invest in whole life insurance yet since you may want to save on your insurance premium, and you believe you would be able to secure Underwriting from your insurance provider at the end of the term , making you eligible for, perhaps, whole life insurance, you may set a term that would be in line with your earnings and projected savings.
The good thing about term plan is that it is affordable, and is available in a wide range of terms. With this, you could start early and stay covered for the period of your choice, while you could go in for a new cover when you have crossed the timeframes that you have set for your term plans. In any case, term life insurance tends to be much more attractive in terms of costs if you start off early in life rather than waiting till late.