Pros and Cons of Temporary Life Insurance

If you want the no frills insurance type without the savings option, temporary life insurance is one alternative to look into. Basically, term life insurance is known as temporary life insurance in a sense that it lasts for a limited period only, with fixed rate of payments during the relevant term. After the term, the set premium will change. You can renew the coverage or look for other policies with different conditions and payments based on your needs. Same with other types of life insurance, death benefits are given to beneficiaries in case of death of the insured during the term. As with any type of investment, it also has its pros and cons that smart consumers must fully understand.

Pros of temporary life insurance

With no cash value, temporary life insurance is cheaper than other life insurance options. There are no savings option, so you can make your own investments. With lower rates, you can provide insurance for your family and buy policies with higher amounts of coverage. Another advantage is that it is fairly easy to buy and understand. Basically, you just have to know how long you need the insurance and how much you need until that time. It is, so far, the best option for limited insurance needs. Once your kids have gone to college or had their own families, for instance, some people say that that there's little need for life insurance.

Cons of temporary life insurance

While it's true that temporary life insurance is more affordable, the rates are bound to change once it expires. At that time, you may find the insurance rates to be on a hike because of market changes. As you age, expect the insurance premiums to be tougher on your budget. At the end of the term and you still need insurance, you will have to start from scratch. In case you have outlived your policy or chose to cancel, you won't get any refund. This simply means that you have paid thousands of dollars for an insurance policy you didn't get to use.

Kanetix Helped Save Airdrie $1000's on Insurance last year. How Much will YOU save?