Temporary Life Insurance

By Author: Frank Kasimov
Total Articles: 4717
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Although it is not something we like to think about, the end will come for all of us. Making proper provisions for our loved ones is something we should consider and take insurance for. Temporary life insurance is one of the cheapest solutions but it doesn't accumulate any cash value and is only valid for the agreed term. So, just what is temporary term insurance and do you need it? It is an insurance policy for a fixed period. It's s simple as that, and definitely worth considering.

Basically, what you are looking at is a product that provides coverage as long as you pay the monthly premium. There is no value to this policy. If you survive the term of the policy, there is no cash value so don't expect any money back. However, if you want to ensure that in the event of your death you have provided for loved ones and want a policy fixed over a period of your choice, then this is the best bet. This is normally designed to tie in with a mortgage. For example, you will pay into an insurance premium that will cover the outstanding value of your mortgage should you die before you have completed your payments. If you make your ...
... final mortgage payment and are still in good health, the premiums cease and the coverage finishes, and you get nothing back in return.

Again, as with all insurance, this is a gamble and you need to weigh the pros and cons of each life insurance premium and decide the best route for you. Temporary term insurance is still going to be one of the best if you are looking for an effective policy that does not cost a ton of money. The temporary term insurance policy covers three main areas and many companies offer different permutations of these factors. These areas are the length of the policy, how much the premium is, and most importantly, how much the benefit payout will be if the unthinkable happens.

This type of insurance doesn't have to be tied to a mortgage. Some policies are tied to mortgages but there are many others available that are not. They are available on many different terms within the three main categories. Term insurance tends to be the cheapest option, and provides a lump sum payout in the event of your death. Some policies will also allow critical illness coverage to be added, which means the lump sum would then be paid while you are still alive. This could enable you to pay off your mortgage at a time when your health makes working difficult. Most premiums are monthly; however, if it suits you better some companies will allow annual payment. Remember to keep up your payments or the coverage will immediately cease; your family would then receive nothing when you die which obviously wouldn't be what you wanted.

Other Options
The alternatives to temporary insurance are things like permanent insurance where your policy is set to mature, meaning that you will be guaranteed to get money back. However, these are more expensive in the first place, as the company has to make sure that it has the money to pay you with, whereas a percentage of temporary cover policies are going to end with no payout, leaving the company better off by the value of premiums paid in. Therefore, you are going to find more places offering this type of policy as they will make more money in the long run. However, again this really is a case of weighing your personal needs and deciding which type of coverage you think will suit you best. You need a policy that meets your family's needs, whether you are simply seeking a policy that protects your mortgage or one that will guarantee a payout.
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