Editor’s note: This is the second in a four-part series on exploring the benefits of life insurance. Part three will appear in the Feb. 28 issue of the AFN.

People often don’t look at the complete picture of life insurance until something big happens. By that time, however, it may be too late.

Term life insurance is an excellent option for people who can’t afford permanent life insurance or need life insurance for a limited period of time.

A term life policy lasts for a fixed period of time, from one to 30 years or longer. It’s often purchased to provide funds for financial obligations, such as a mortgage or child’s tuition, in case the insured dies.

An advantage of a term life policy is that its initial premiums are typically less expensive than other types of life insurance. This may be ideal for young families who want additional coverage for expenses such as childcare in the event one or both of the parents pass away.

Depending on your reasons for purchasing term life insurance, you can choose either a level or decreasing death benefit. A level death benefit provides the same amount of coverage for the entire policy period. If you select a decreasing death benefit, your amount of insurance will go down over the length of the policy.

Term life insurance is often renewable, subject to limitations in the policy, although the premiums will likely increase to compensate for the higher age of the policy owner. Some term policies may also be converted to whole life or universal life insurance.

Unlike whole life or universal life policies, term life insurance does not accumulate cash value. I will talk more about whole life and universal life insurance in my next two columns.

• Jay Gandee has been an agent for American Family Insurance since 2011. His office is located at 4730 E. Warner Road, Suite 12, in Ahwatukee. Contact him at (480) 785-7777.

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