Tuesday, 23 October 2012

Long Term Life Insurance Policy is suitable or not?

Term life insurance policy which taken for an extended period of time is known as long term life insurance policy. Normally insurance policies are for a short period say one to seven years. But a few people are interested to insure for a long time. If so insurance companies offer a variety of products for long period of time which may be a whole life insurance or any traditional term life insurance.

If people are not ready for paying premium for a whole life insurance policy, they have the choice to choose a long term life insurance. The whole life insurance may be added with some investment opportunities and so the premium may be higher than long term life insurance. So the customer those who do not wish to pay such high premium they can opt this long term life policies.

This long term insurance can be named as Permanent Life Policies which often offer the payment after the death of the insured. Actually these policies are bridging the gap between whole life insurance policy and long term life insurance policies. This is flexible and can choose cash value after a stipulated time period or can go for death benefit to the nominee or can accept as a monthly payment.

But keep in mind that the long term policies are expensive than short term policies, because it should insure the life of the insured for a long time. The risk is higher than short term policies from the side of Insurance Company. You can discuss this matter with your insurance provider or insurance agent. For short term policies the premium may comparatively lesser than that of long term policies. But after a short term say 5 or 7 years, you have to insure for another short term or long term to compensate any unfortunate event. Then you must pay high premium, because you are older than your earlier policy. So you have to pay high premium because of your age. In such a case long term life insurance policy is suitable. For example you are at the age of 25 and join for a long term policy for 5 years with 10000 bucks annual premium for the long term policy for the same cash value is 12000 bucks. But you have joined for the short term policy and after 5 years your policy is matured and you had to join another short term policy for 5 years with an annual premium of 15000 bucks for the same sum assured. But if you joined for the long term policy you premium would continue 12000 bucks even after 5 years or 10 years.

Think all aspects and check from all angles when you choose a life insurance policy. Compare various insurance quotes and check all possibilities before joining a life insurance whether it is long term or short term policy.


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