5 Year Term Life Insurance Policy Or Rider

The 5 year term life insurance policy has been around in insurance circles for a very long time. It can be sold as a policy or as a rider to a permanent life insurance policy. It was never promoted much by life insurance agents perhaps because of it’s extremely low premium which results in a very low commission. Another consideration is that 5 years is a very short period of time for ownership of a life insurance policy. The 5 year term life insurance policy is worth a little of your attention. It is a good policy…depending on your need.

• Why A 5 Year Term Life Insurance Policy?5 year term life does have it’s place in the portfolios of many life insurance buyers and can fulfill a very important need. If you have a short term need for life insurance then this type of insurance may be for you. If you find it necessary to take out a loan for a short period of time a five year term life insurance policy on your life can assure the lender that if you should die before the loan is repaid they will get back their money…Certainly that is a good reason to buy this type of insurance. You may take the loan to pay for a college education either for yourself or a child or grandchild.The face amount of the 5 year term life insurance policy remains level for the duration and so does the premium. Even though it is initially taken out for 5 years some companies allow you to continue beyond the initial 5 year period at a higher premium. The death benefit is more often than not free of income taxes. You may convert your policy to permanent insurance in the future.
• Waiver Of Premium RiderIt may be wise to add a waiver of premium rider to your 5 year term life insurance policy. If you should become disabled…anytime after 6 months of disability…the life insurance company will take over the payment of your premiums for you, even if it is for the rest of your life. Think about it for a moment…Do you realize that people become temporarily disabled an average of about 5 times during their lifetime. If you become disabled for at least 6 months with most companies they will pay your 5 year term life insurance premium for you…even if your disability lasts for the rest of your life. Now isn’t that amazing? If and whenever you return to work you pick up the premiums from that point…you owe the life insurance nothing for the unpaid premiums.
• Accidental Death Benefit Or Double Indemnity RiderThe famous double indemnity rider can also be attached to your 5 year term life insurance policy. If you should die in an accident the life insurance company will pay to your beneficiary twice the face amount of your policy. Let us suppose you bought a $500,000 5 year term life insurance policy with one unit of accidental death benefit for each $1,000 of your policy and you died in an accident. The life insurance company would pay $1,000,000 to your family. That would be just beautiful, wouldn’t it?