I recently did some research on the development of the 30 year term insurance policy over the years. What I learned was quite interesting. Because of the tremendous interest in term insurance the life insurance companies have greatly improved this policy. Think about it, you graduate college, you probably get married after you get a good job and accumulate some money either in the bank or in some good investment of your choice. You of course buy a home for your new family. You have a need for some life insurance now to protect them in the event of your premature death. You decide that a 30 year term insurance policy would be good for you. Here is how it works.
The 30 Year Level Term Policy.
The 30 year term policy maintains a level death benefit throughout the lifetime of the policy. The premiums also remain level for many of the newer 30 year term insurance policies. It used to be, and is some cases it still is so, that the premium would be lower in the first five or so years then it would increase. Many of the better companies now maintain a level premium throughout the life of the policy. What is amazing is that they keep the premiums so very low. That is good for the insurance buyer and it seems to be good also for the companies as they sell a lot of this type of insurance.
The 30 Year Return Of Premium Policy
If you are willing to pay a little more premium you can get a 30 year return of premium policy. The face amount of the policy remains level throughout and so does the premium. The great thing about this policy is that if you don't die within the 30 year period you get a return of all your premiums. Isn't that just great? Just imagine you pay your life insurance premiums for 30 years and if you died the insurance company would pay your family the full face amount of the policy. If you don't die they give you back your money. I think that is the best of both worlds.
The Waiver Of Premium Rider
You can add the waiver of premium rider to either of your 30 year term insurance policies. If you should become disabled, anytime after 6 months of disability, the life insurance company will step in and pay the premiums for you even if it is for the rest of your life.
The Accidental Death Benefit Rider
You can also add the accidental death benefit or double indemnity rider. If you should die in an accident the company will pay your family twice the face amount. If you had a policy for $500,000 and you died in an accident the company would pay $1,000,000 to your family.
I am a strong believer in the 20 year term policy but it seems to me that with such great improvements the 30 year term insurance policy is worth serious consideration.
