The Basics of 20 Year Term Life Insurance

Are you considering applying for a term life insurance policy? Before acquiring a term life insurance policy, it is important to understand your needs and to know the difference between term life and permanent life insurance. That way, you can pick the policy and term that is best for you and your loved ones.

The primary difference between a term life insurance policy and a permanent policy is that a term policy does not build cash value over time and it only stays in place for a predetermined length of time. The 20 year term life insurance policy is one of the most popular among those that want to have a life insurance policy in place to protect their family while the children are still young. This way, the children are properly protected while they are still young and will end after they have become adults and can take care of themselves.

When acquiring a 20 year term life insurance policy, it is important to carefully consider who you will list as the beneficiary to your policy. The beneficiary is the person that will receive money from the policy in the event of your death. If you are married, for example, you may list your spouse as the beneficiary. This way, you can be reasonably certain that your spouse and your children will be cared for if you should pass away.

It is important to note that a 20 year term life insurance policy expires at the end of the 20 year term. Therefore, if you still wish to have coverage in place after the 20 years are completed, you will need to reapply for new coverage. At this point, it may be more difficult for you to acquire coverage and it may also be more expensive because you are older and considered a higher risk. In other words, the greater the probability that you will die during the term of the policy, the higher your premiums will be. As such, you need to carefully consider the length of time you need your policy to be in place before you purchase a term life insurance plan.