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Term or Permanent When It Comes to Life Insurance

A majority of term life insurance is purchased through the work place, most often as group term. In this case the insured's policy is actually part of a group policy with very little features beyond basic death benefit. The good news is it is very cheap with little if no underwriting; can be purchased usually in 1 to 5X salary. The bad news is, this type of life coverage ends when the insured leaves the company sponsoring the plan. In some cases the life coverage ends for employees over 50. If per chance the insured is going to retire and for health reasons does not qualify for their own life policy, their only chance to retain some coverage may be to convert a limited portion of the group term to a standard smoker rated, simple and sometimes antiquated cash value policy.

A personally owned term life policy, with a solid rated company on the other hand can go with you from job to job since you pay for it privately. It will also tell you in the policy how many years you have to convert to another form of permanent life insurance, (often 10 years with no underwriting at the same rating, like preferred or standard non-smoker). The really good news is if the term is through a reputable company they probably will have many choices as to the type of permanent life insurance you can choose from be it a Universal life, Whole Life, or Indexed Universal life policy. These type of policies may have many features which can make a huge difference in your long term retirement planning because of their guarantees and cutting edge living benefits.

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