Term Life Insurance Plan: Choosing Your Lock In Period

There are so many factors that force us to be very careful in our life. Inflation rate is still steadily increasing, unstable economy and unforeseen recession. These are just some of the worries which are building up on our daily lives. The solution: Life insurance plan.

Life insurance plan keeps us from worrying about things that we are afraid of. You need to make sure though that you get the right life insurance for you. Some agents will just tell you to buy from them but what they are offering you might just be mortgage insurance policies.

The main question is, if you buy term life insurance, how long would you lock in?

Short-term Insurance

These are the type of insurance with minimal annual premium. This yearly premium can be adjusted either by certain locked in period such 10, 15, or 20 years up or annually. The longer the locked in period would be the higher is the premium.

There are many things to consider in determining how long should we lock in. You need to figure out how long you will need to be insured. You can start by calculating the age of your youngest son and estimating on what age will your children be on their own and doesn’t need your financial support anymore.

Insurance gets expensive as you enter your 60’s. This means that you may pay more to cover for the years that you are no longer working. Also your spouse needs to be taken into consideration too.

Permanent Insurance

This is the lifetime lock of your insurance. With this you can have your money be invested into some of the firms owned by your insuring bank. This will produce the best results as most of this will become cash reserve. Most insurance agent discourage you to purchase term investments as this will give them lower commissions than other types of insurance.  It is best to ask agents only which really cares about how to protect you from some unforeseen circumstances.

The good thing about permanent life insurance is that you are investing on something. The drawback of this investment though is that you won’t know how much of your monthly premiums exactly go to this investment. Most agents call these plans as “retirement plan”. Some insurance companies offer this retirement plan together with their life insurance plan. But basically, retirement plan is just what you gain by investing on the life insurance plan.