June 22, 2024

The term life insurance policy is a policy that is set over a predetermined period of time. However, policy owner has a choice of renewing the policy as per his wish. Or he can simply choose to end the coverage. This insurance policy is designed specially to provide you coverage for a limited amount of time. Term life insurance policies are usually available for a time period of 1, 5, 10 and 20 years. There is three type of term life insurance policies which have their advantages and disadvantages.

  • Level term life insurance
  • Decreasing term life insurance
  • Yearly renewable life insurance

Due to its simplicity and affordability, a lot of people are now opting for this option. Many major insurance companies such as banner life insurance provide good and affordable term life insurance packages. We will discuss some of the pros and cons associated with term life insurance.


The term life insurance has a lot of pros which are mentioned below

  • Affordability

One of the major reason as to why people are more inclined towards term life insurance policy is its affordability. It is less than half the price of the cheapest full life insurance policy. For a 20-year term insurance with a face value of $600,000, the monthly charges can be approximately as low as $34 for a 35-year-old individual. Such low rates make this the best option for people who don’t want to spend a fortune on full life insurance policies.

  • Simplicity

Another reason people are selecting this policy is the simplicity it offers. The permanent life insurance policies come with a cash value accumulation which is often very hard to explain to a layman. This confuses the insurer and he can actually think about not taking a policy whatsoever. The main principle of term life insurance is simple and easy to understand. You just have to pay a premium for a set number of years and if something happens to you during that time your family will receive a set amount of cash.

  • Convertibility and Extension

One of the biggest pros of term life insurance policy that often goes unnoticed is the convertibility it offers. The term life insurance policy can be extended or converted to a full permanent life insurance policy. And the best part about this conversion is that you don’t even have to provide the proof that you are insurable. Even if your health is depleting the extension or conversion is guaranteed.


Like every good insurance policy term, life insurance has its cons but they are definitely less than its pros.

  • Expiration

Although the term insurance policy is extendable there is a catch to it. The premium that you are used to paying every month will shoot up if you opt for an extension. So when the term ends either you will have no insurance or you’ll have to pay more premium each month.

  • No Cash Value

One of the major drawbacks of this insurance policy is that there is no cash accumulation value attached to it. If you outlive the insured term you don’t get any benefit from the policy. So the people who choose life insurance policy as a source of investment this is not the option for them.

Leave a Reply

Your email address will not be published. Required fields are marked *