30 Year Term Life Insurance: A Basic Guide

2007-03-08 10:33:40

( Insurance )



A term life insurance is a temporary type of insurance that offers protection for only a certain period of time.

As the name implies, a 30 year term life insurance has a coverage period of 30 years. Consequently, a 20 year term life insurance only covers you for 20 years, and so on and so forth.

30 Year Term Life Insurance

For purposes of discussion, let us focus on a 30 year term life insurance plan.

As mentioned, protection lasts for 30 years under this plan. If anything should happen to you within this specific time period, your beneficiaries will receive the entire sum assured.

After 30 years, however, the insurance lapses. Therefore, protection also ceases.

If you meet your demise after the plan has been terminated, your beneficiaries will not get anything from your insurance company.

Advantages of Term Life Insurance

The most popular reason for getting short term insurance, as opposed to permanent life insurance, is its affordability.

A term life insurance is less expensive than other forms of life insurance primarily because it does not have any investment elements. This means that the premium, or the amount of money you pay for the insurance, does not accumulate cash values or interest earnings.

The singular focus of a term life insurance is protection – that is, protection of your family. It is not concerned with translating your premiums into supplementary income. This is why the premiums are significantly cheaper.

Most individuals who get a 30 year term life insurance are those who are applying for loans. Most lenders require life insurance as collateral to a loan. If the borrower could not afford the expensive premiums of a permanent life insurance plan, a term life insurance is used as a cheaper alternative.

Disadvantages of Term Life Insurance

The most obvious disadvantage of a 30 year term life insurance is the shortened period of protection.

Often, the principal purpose of getting insured is to protect your family from any eventualities. If your policy does not offer protection for an indefinite period, you are exposing your family to certain vulnerabilities.

Additionally, a 30 year term life insurance will not accrue income for you and your family. Because it excludes the investment element of other forms of insurance, you will never earn from the premiums you are paying. Only the insurance company, in effect, profits from your premiums.

If you want to get both maximum protection and savings, you should consider a permanent life insurance plan instead.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.