bluecollardollar: on term life insurance

The Who, What, When, Where and Why of Retirement

The mutual fund investor has a great many more options available to them in the post-Great Recession marketplace. The question is: are they right for you as you make a retirement plan using 401(k)s or IRAs?
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Term insurance insures at a specific rate for a specific period of time for a specific amount. This is a great policy for young people. It allows them to cover themselves for large amounts without incurring a large cost for the premium. The policies can run for any length of time, but the usual term is written for twenty years.

Common types of level term are:

• yearly- (or annually-) renewable term
  
• 5-year renewable term
  
• 10-year term
  
• 15-year term
  
• 20-year term
  
• 25-year term
  
• 30-year term
  

  This allows the young insured people the ability to continue life without being overinsured or cash poor. This also assumes that you will invest the difference in what cash value and term would cost. This assumption is very important. The expected rise in income over that period which should increase the amount of money invested in retirement plans such as a 401(k) or IRAs and if that happens according to plan, the need for insurance greatly diminishes. In other words, when the nest is empty, you will not need to insure loss of income because you have invested wisely, stayed out of debt, and have increased your asset base giving your survivors greater financial security.

  Now should you die during the term period, the beneficiary gets the amount designated. After the term ends, the policy stops. At this point, you may be able to renew the same policy for a new period, and you may be able to do this without a medical exam. But trying to find a policy of this type later in life can be expensive, and might be next to impossible if during the previous years you developed some sort of medical condition.

  Term is designed for those with a high need for insurance but a low cash flow.

  These policies have no cash value. When the policy expires, there is no money to distribute.

  It is important to remember that your policy is only as good as the company issuing the policy.

  There are several agencies that do just that. To see how these ratings are assessed, you can see a list of agency rating types here.

  Information on permanent life insurance

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