Life insurance is a necessary part of your overall financial portfolio and an important consideration in regard to future financial planning, according to "Questions and Answers on Life Insurance" by Anthony Steuer. If you currently maintain at least some life insurance coverage, you may desire to add supplemental term life insurance to your overall portfolio.
Function
The underlying function of supplemental term life insurance is to provide you additional coverage for a specified period of time, according to Steuer. Term life insurance is a policy that remains in force for a set period of time, such as 10 years.
Objective
The objectives of term life insurance include providing additional financial resources for your family at the time of your death. For example, adding this type of additional life insurance coverage serves as a resource to pay for funeral or other types of expenses at the time of your death.
Size
The dollar amount of the benefit associated with a supplemental term life insurance policy typically is a moderate amount. For example, a common policy benefit for this type of life insurance is $10,000. Indeed, the benefit provided at the time of death through this type of coverage is even lower under the terms of some policies, according to "The Life Insurance Handbook," by Louis S. Shuntich.
Warning
Because this type of term life insurance is designed to supplement more extensive coverage, you cannot rely on the benefit to provide significant financial assistance to your loved ones at the time you die. This type of insurance is not designed to provide a financial benefit sufficient to assist your family in dealing with the costs of day-to-day living for an extended period of time.
Cost
Term insurance generally is considered the most affordable type of life insurance on the market today, according to Steuer. Moreover, because of the limited benefit amount associated with this type of life insurance coverage, the premium is even more inexpensive than what is charged for other insurance policies.
References
- "Questions and Answers on Life Insurance"; Anthony Steuer; 2010
- "The Life Insurance Handbook"; Louis S. Shuntich; 2003
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