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Friday, November 20, 2009
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FAQ’s: Life Insurance
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Call us at (800) 940-3002
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What is the advantage of level term life insurance vs. yearly renewable term life
insurance?
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The advantage of level term life insurance is that the premiums
remain level over a specified period of time.
Yearly renewable term life insurance has a lower initial premium; however,
the premium rises each year. Yearly renewable term life insurance is only cost effective
for a few years because of the rising premiums. If you need term insurance
protection for more than a few years, then a level term life insurance policy
can cost less.
Please carefully consider the length of the level premium period that will suit
your needs. For example, if the primary purpose of the death benefit is to provide
income to
support
very young children and/or to fund college education expenses, a 20-year level premium
might be appropriate. If these children are already in their young teens, you may
need only a 10-year level premium (longer level premium policies are more expensive).
After the level premium period expires, most policies require you to re-qualify
with medical underwriting in order to receive a favorable premium. If you do not
or cannot re-qualify, the premium typically rises dramatically after the expiration
of the level premium period.
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