The 20 year term life insurance policy can be effectively used in oh so many situations. We will look at some of them but first let us define what this policy is all about. 20 year term insurance has a level death benefit for the entire 20 year period. This death benefit can be paid in one lump sum or in income form. The premiums, more often than not, are also level for the duration. Sometimes a life insurance carrier may elect to allow applicants to start the policy at a lower initial rate then increase it at a specific predetermined date in the future, for example, at the 5 year point or 10 year point. How could you effectively put a 20 year term life insurance policy to use?
If you are married and you have children the youngest of which, for example, is 5 years old this policy could cover all your immediate life coverage needs. This policy can determine that your present income will continue after your death. It could be used to provide planned sums of money that would be used to pay college costs for your children even if you are not around to share the event with them.
A portion of the proceeds of your 20 year term policy could provide funds to pay final expenses and burial costs.
If you are single and have no dependents this policy can be used to put you six feet under without any financial burden to your relatives. Why would you use this policy? The answer is simple. Although your need for life insurance is limited today, over the next 10 or 20 years you likely will have a need. As the price is so very low at the younger ages it may be wise to buy the policy now and when the time comes that you really need to own insurance you will already have it. You should also keep in mind that as you get older there is a possibility that you could develop some illness that may cause the company to charge you extra or to disqualify from obtaining a policy.
If you are single and have children your need will be much like a married person with dependents.
We tend more often than not to give much thought to the needs of the children in the event of the death of a parent. That is great but what of the needs of the surviving spouse. If the children are grown and on their own we still have each other. What if one of us should die. What of the surviving spouse. Is his or her income sufficient to live. Is the mortgage paid off or will the surviving spouse have to continue monthly payments. Think on these things. The 20 year term policy could provide cash or income for your surviving spouse which would be used to take care of these things.
Many business people find it a good decision to buy 20 year term life insurance. Business people tend to plan 1 year ahead, 5 years ahead, 10 years ahead and 20 years ahead. They may use life insurance to fund buy sell agreements if a partner or shareholder should die. They could buy out the shares from the heirs of the deceases partner or shareholder. Both surviving family and surviving shareholders should be pleased in this case. This policy is often used for key employee insurance. The death of a key person can devastate a business while they go about replacing this valued employee. The 20 year policy is a favorite for these business situations.
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