As the significant bread winner for the family, have you made plans to protect your loved ones in the unforeseen event you pass away? You've probably heard about the benefits of life insurance, but given this economy you're probably looking for the most cost effective option. Enter: Term Life.

Motley Fool just published the bare minimum essentials you need to know before you purchase a term life policy. Here is just a portion of the article:

Typically, when you buy a term insurance policy, you lock in a particular rate class that's based on your age, smoking habits, and health at the start of the term. When it comes time to renew a term policy, you can't do much about your age. You'll be older, so your rate will be higher. This much is entirely predictable and not worth worrying about or maneuvering to beat. That's where renew ability comes into play.

Some "renewable" term policies just make it easy to renew, but require a medical exam, leaving you exposed to big problems should health issues surface later. What you want is guaranteed renewability without a medical exam. This is especially true if the policy term won't take you close to retirement age.

Besides that, there are three other key components to consider:

1. The policy term - Term policies are either annually renewable (one-year term) or cover terms from five to 30 years (e.g., five, 10, 20, 30). Think of annually renewable term as the basic building block on which longer-term policies are built.
2. Guaranteed level premiums - Before you purchase a multiyear term policy, be sure that the premium is guaranteed to be level over the entire term. A surprising number of "level term" policies guarantee this for just a portion of the term. After this partial term is over, premiums might increase, although these increases are usually subject to some guaranteed maximum.
3. Ability to convert to a cash value policy - Getting a "convertible" term policy is generally a good idea. These are priced competitively with similar policies that don't include this provision, so you really have nothing to lose. This feature allows you to convert the policy to an equivalent cash value policy from the same company, without a medical exam, should there be a fundamental change in your health or retirement plans during the policy term.

Click here to read the article in its entirety. And, remember, if you need to speak with a professional about life insurance, just drop me a line.

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