Buying life insurance in Burlington, North Carolina can be an important part of your strategy for protecting your family and planning for your future. If something should happen to you, having a term life insurance policy can provide the money your spouse and children will need to get on with their lives.
All term life insurance is designed to pay out a death benefit if the insured dies at some point during the specified term. If you have a 20 year term life policy and you die after it has been in effect for 10 years, your beneficiaries will receive a payout. The monthly premiums remain the same for the duration of the policy in all term life policies
Term policies can either be level-term or decreasing term. The difference between level-term and decreasing term is that the face value, or death benefit stays the same throughout the level-term policy and it decreases as you get further along in age in a decreasing term policy.
A level-term policy is usually purchased because you want to leave a lump-sum amount of money to you beneficiaries should you die during that term. A decreasing term policy is usually tied to a mortgage or some other long-term debt obligation. This type of policy is sometimes called mortgage life insurance. You buy such a policy because you want to make sure your mortgage will be paid off in the event of your death. As the years go by, the principal amount of your mortgage declines and so too does the dollar amount of insurance coverage. If structured properly, your level of insurance will coincide with the amount remaining on your mortgage as the years go by.
Decreasing term policies have a lower monthly premium than level-term policies because the amount of your coverage decreases over the years. Even if you have a mortgage, you may still want to purchase a level-term policy.
Give us a call and ask an independent agent why it can be smart to buy a level-term policy instead of a decreasing term policy. At Don Allred Insurance, we welcome the chance to answer all of your questions and help you make the right decision about life and all of your other insurance needs.