The premium is level or unchanged during the initial time period.
Term provides young families with high face values of coverage and the opportunity to convert when finances permit.
Term life insurance provides coverage for the years when you need it most.
Term gives you the option of deciding how long you need the coverage to last.
You can purchase a high face value for nothing more than the cost of insurance itself.
If you have the discipline to do so, you can take advantage of a period of low premiums to invest money in a mutual fund or IRA, thereby having funds at your disposal when the life insurance expires.
Most policies are either guaranteed renewable or convertible to another type of insurance offered by the same company—without proof of medical insurability.
A convertible policy allows you to convert part or all of your policy to whole life.
Disadvantages of Term Life
The premiums increase sharply when the initial term expires.
It is possible to outlive your policy as most terms cannot be renewed after a certain age—often 85 or 95.
If you develop chronic health conditions, you may not have the option of purchasing a less expensive policy and thus may be locked into a renewable term or may face the option of no insurance at all.
The death benefit cannot be changed except by rewriting the policy.
The policy has no savings or cash value and cannot be borrowed against.
If you miss a payment, you will have a 30 day grace period after which your policy will lapse. There will be no surrender value.
You cannot change your premium or have a paid up policy.
A term policy in the long run will cost much more than having a universal or whole life to start with unless you have no intention of trying to keep it once it has expired.
