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it is very cheap and provides good protection. As for the term being up you start over, that is true. Most term life requires the insurer to insure policy holders beyond the term even if the insured is otherwise uninsurable. The term is usually long enough to change the needs of the insured downward when the term expires. For those who are not insurance savvy 'term life insurance' is strictly insurance, no savings or cash value. 'Whole life' or 'universal life' is insurance which part of your premium goes into an investment vehicle of one type or another, the premiums are usually 2 to 5 times the cost of term insurance. If you have a hard time saving money on your own it can be ok. The traditional wisdom is that if a wage earner in the family gets sick or looses their job they may not be able to afford the higher premium. Additionally there are usually better saving vehicles available than those attached to life insurance.
There are two basic types of insurance which anyone who is buying insurance should be aware. Contestable and noncontestable, contestable insurance is usually cheaper than noncontestable and contestable often doesn't require a physical. A contestable policy usually requires the insured to fill out a health questionnaire. When a claim is filed the insurance company pulls the questionnaire and if they can prove any deception or if the insurance company simply doesn't feel like paying they will deny coverage. This leaves the beneficiary in a position of having to legally fight the insurance company for the money. Many noncontestable policies have a contestable period (maybe 1 or 2 years) it is very important therefore not to lie on any insurance document, most policies with a contestable period will pay if the application/questionnaire was filled out truthfully after the contestable period the policy pays no questions asked. Most 'credit life', life insurance which insures that a specific debt will be paid if the insured dies before the loan is satisfied, are contestable policies so beware of credit life. You are usually far better off to increase your term policy or buy a separate term policy to cover the debt rather than buy credit life.
The equation used to determine how much life insurance is needed depends on what the goals of the insured. Generally one would add up all long term debt. Then would determine how much income in addition to the income of the surviving spouse or beneficiary would be needed for the survivor to maintain their current standard of living. Take the latter number times 10 and add to the long term debt. For instance if long term debt equals $250,000 (home, primary vehicle, college tuition, etc.) and the survivor would need $50k per year to maintain their current lifestyle (in the absence of the long term debt), $750,000 life insurance should be adequate assuming that there is also adequate health insurance to pay medical bills which could proceed the death.
Life insurance term or whole life are not savings plans or lotteries, they are specifically for insuring the lifestyle of the survivor(s) and nothing more. If someone is 25 and starting a family the policy is necessarily larger than if the person is 65 with grown kids, no mortgage, a retirement plan, and only a spouse dependent, in which case life insurance is usually too expensive anyway.
So bottom line, buy a term policy which is right for you. Be wary of policies which do not require a physical and READ THE POLICY when you receive it or take it to your lawyer to read. Know what you have BEFORE you need it. But by all means buy life insurance if your significant other is dependent on you.
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