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Several decades ago, whole life insurance was much more popular than term insurance. People preferred a policy that would never expire and that they could withdraw money from, much like they could a savings account at a bank. However, as the cost of living rose, many individuals discovered that they could not afford the high premiums for whole life insurance policies sufficient enough to support their families. Hence, term life insurance is rising in popularity.
Many individuals choose term life insurance to fit temporary circumstances if they become unable to provide for their family. Many working men and women purchase bigger term life insurance policies while they have children at home but allow the insurance policies to expire after the children grow up. Others have term insurance when their children are in college to ensure that tuition will be paid should something unexpected happen.
Term life insurance is becoming more popular because it allows individuals to purchase a lot of coverage for a low monthly payment. In fact, the monthly premiums are still reasonably low even for individuals nearing middle age. Some people who have a limited monthly budget can afford to choose half a million to a million dollars of coverage to allow their family to continue living comfortably should something happen to them.
As the popularity of term life insurance is rising, new types of policies are being offered. Traditional term offers level payments for a specified period of time, usually 10, 20 or 30 years. However, some families are choosing a policy with return of premium. For a slightly higher premium each month, they will receive back all the money paid into it at the end of the term.
The cost of any type of life insurance depends directly on the age and health of the individual to be insured. Many will want to get a quote here for a term life insurance policy, while others will prefer to chat with an insurance agent to get answers to all their questions. Whatever the case, every person that cares for a family member or an elderly parent will probably want to have a secure life insurance policy with affordable payments.
I didn’t know about return-of-premium riders. This seems a great way for some folks to build savings while simultaneously protecting their family from financial disaster. Off to do some more research…
Good luck! Hope you find some good stuff!
Term insurance is where the insurance companies make the bulk of their money. The fact is over 90% of the claims are made against whole life policies. I personally have both term and whole life, I bought my whole life 7 years ago at age 25. Now it increases in value more than I put into it each year. I need to make some sacrifices to buy even more.
Interesting stats Scott. I didn’t know that. It would be interesting to read up on some theories as to why this is the case.