Length of time insurance has two features that make it attractive:
- A guarantee on the premium and survivor benefit for a defined amount of years, depending on the associates, age of the insured and other factors.
- No capability of accumulating cash inside the policy. You can’t pay an extra premium to get extra benefit. You can’t over money from other accounts into the policy. The carrier will not pay dividends or apply interest to your account.
This merchandise is ideal for covering yourself for a single need, for a specific amount of time. An example is indemnifying a mortgage or business credit.
The kicker is that if you outlive this time and still need coverage, the price of term insurance typically augments astronomically after the guarantee period.
Steve Kobrin
The firm of Steven H. Kobrin, LUTCF
Fair Lawn, NJ