When making the decision of what life insurance to take out it generally comes down to two choices; either term or whole. These are pretty much self explanatory due to their names. Term life insurance is taken out for a certain, specific amount of time; it is generally a temporary form of insurance whereas whole is a type of insurance that you pay into for the long run; you will be paying it up until your death.

The choice that you make when it comes to which policy you take out depends on your individual circumstances. Each policy has their advantages and disadvantages but the most important thing that you need to make sure of is that you look at these advantages and disadvantages in relation to your individual circumstances; term life insurance is however growing rapidly in population so let me explain a little bit more about it.

As I have previously mentioned it is a temporary policy that is taken out for a specific amount of time. This term lasts for as long as you need it to last, which could be five, ten or twenty years etc; it enables you to just pay for the time that you will use the policy for. It is quick to arrange and easy to understand meaning you will know exactly where you stand. So how exactly does the policy work? Well as it is taken out for a specific amount of time you are only covered by the insurance for that amount of time, so if you take out a term policy for 20 years and you pass away in the 18th year then your family will receive a payout. If however you were to pass away in the 21st year; just after your policy ended, your loved ones would receive nothing.

A term policy isn’t for everyone; the main target market of it is in fact young and growing families with limited income; people who need the protection of insurance but not to the extreme that they need to be tied to lengthy contracts. Term life insurance policy gives you the protection that you need for your family but at a much lower cost than whole insurance. The reason that it is a lot cheaper is due to the fact that you could outlive your policy, meaning you won’t require a payout so your insurer won’t require high monthly payments. Also you can personalize the policy through selecting the terms and coverage that apply the most to your lifestyle. Some of the main reasons as to why people take out this policy are the following:

* For estate planning
* The maintenance of dependents’ standard of living in case of your untimely death
* Payment of mortgage and other debts in case of your untimely death

As with all insurance, there are certain disadvantages to term life insurance such as the fact it doesn’t build up any cash value and you will need to take out another policy when this one ends. These points however don’t matter if you are looking for a simple and affordable way of protecting your family.

So if you have a young family, a limited income or you simple just want some protection without having to pay out a large amount every month then term life insurance is perfect for you. But as with all decisions you need to make sure that you thoroughly look into what the policy can do for you before making any final decisions.