Five years Term Life Insurance

The 5 year term life insurance policy has been around in insurance circles for a very long time.

It can be sold as a policy or as a rider to a permanent life insurance policy.It was never promoted much by life insurance agents perhaps because of it's extremely low premium which results in low commission.

Another consideration is that 5 years is a very short period of time for ownership of a life insurance policy. The 5 year term life insurance policy is worth a little of your attention. It is a good policy...depending on your need.

Why a 5 years term policy

5 year term life does have it's place in the portfolios of many life insurance buyers and can fulfill a very important need.If you have a short term need for life insurance then this type of insurance may be for you.If you find it necessary to take out a loan for a short period of time a five year term life insurance policy on your life can assure the lender that if you should die before the loan is repaid they will get back their money...Certainly that is a good reason to buy this type of insurance. You may take the loan to pay for a college education either for yourself or a child or grandchild.The face amount of the 5 year term life insurance policy remains level for the duration and so does the premium.

Even though it is initially taken out for 5 years some companies allow you to continue beyond the initial 5 year period at a higher premium.The death benefit is more often than not free of income taxes.You may convert your policy to permanent insurance in the future.

It may be wise to add a waiver of premium rider to your 5 year term insurance policy.

If you should become disabled...anytime after 6 months of disability...the life insurance company will take over the payment of your premiums for you, even if it is for the rest of your life.Think about it for a moment.

Do you realize that people become temporarily disabled an average of about 5 times during their lifetime.If you become disabled for at least 6 months with most companies they will pay your 5 year term life insurance premium for you...even if your disability lasts for the rest of your life.

Now isn't that amazing

If and whenever you return to work you pick up the premiums from that point...you owe the life insurance nothing for the unpaid premiums.Accidental Death Benefit Or Double Indemnity Rider

The famous double indemnity rider can also be attached to your 5 year term life insurance policy.

If you should die in an accident the life insurance company will pay to your beneficiary twice the face amount of your policy.

Let us suppose you bought a $500,000 5 year term life insurance policy with one unit of accidental death benefit for each $1,000 of your policy and you died in an accident.The life insurance company would pay $1,000,000 to your family. That would be just beautiful, wouldn't it?

Term life insurance is the most affordable – and flexible – Life insurance product available. Why? Because term life insurance provides a specific death benefit amount for a duration – or term – chosen by the policyholder. Once a 10-, 15-, 20-, or 30-year term is selected, the coverage and premium amounts remain the same for the life of the policy. So rather than paying a monthly premium for the rest of your life, you can simply buy coverage for however long you need it – usually until your children are grown and out of the house. Life insurance is a personal affair. Standard formulas such as buying coverage equal to eight, nine or ten times your annual income are inadequate shortcuts. Online calculators can provide a general guide, but it doesn't make sense to say that someone with four young children should have the same amount of coverage as empty nesters with no mortgage and a substantial retirement fund. Other items to consider: The time factor. Figure out how many years you'll need to be covered. Final expenses. Determine the total cost of your funeral, burial and related expenses. Mortgages and other debts. 

Tally your mortgage balance, car loans, student loans, and any other major expenses. Education expenses. This calculation can be tricky because you need to consider the cost of a college education at the time your kids will enroll, as opposed to what it would cost today. Hint: It will be more expensive. Income replacement. Once you cover funeral expenses, debts and education, you need to determine the amount of income required for your family members to sustain their current lifestyle.