It is true that term life is an affordable life insurance. Its rates are within the means of anybody who is young and healthy. Suppose you are a 30-years-old male with a good health and zero tobacco use. You want to buy a term life insurance for thirty years with a coverage amount of $500,000. In such a case, your annual premium will be something between $400 and $450. If you go for monthly premium, the amount will be something between $35 and $40. You can also pay the premium quarterly. In that case, your premium will be something between $100 and $120.

Therefore, for around $40 a month you can buy protection for your family and mental peace for yourself. However, with term life you are entitled to just that. There is no cash value of the policy. Therefore, once those thirty years are over and if you do not die in the meantime, you will not get anything back. Had you bought whole life or universal life, you could have taken a neat some home by now.

Whole life, universal life or variable life are all permanent life insurance policies that are valid for whole of your life, while term life is valid for a fixed term only. Permanent life insurance policies have some advantages over term life:

•    Unlike term life insurance, the beneficiaries get death benefit whenever the insured dies, provided the policy has been kept current by regular payment of premiums.

•    The policies have cash value, which accrue over the period.

•    You can surrender the policy after a stipulated period and get the accrued cash value back.

•    You can avail loan facility whenever you wish.

People buy term life only for its cheap life insurance rates. Sometimes of course, they buy such policies to cover some specific financial responsibilities, such as mortgage on the house or some consumer debt. If such is the case, you will be wiser to buy it under decreasing term life insurance policy. It is not that the rates will decrease over the years, but the face value will. The rates though level are very low under such policies because of the decreasing face value. For a very short insurance need you can buy yearly renewable term life insurance. The rates, under this policy are even cheaper.

You can buy increasing term life insurance as well. Here the face value increases in proportion to cost of living over the duration of the term. The premiums cost less than level term, but higher than decreasing term. The level term is the most popular among the four. Under the level term, the face value remains same through out the term. To achieve this, the insurers typically overcharge the earlier years and undercharge the later years.

You can also buy convertible term life insurance. Under this policy, you can convert your term life insurance policy into a whole life insurance policy later on, without giving any further proof of insurability. This policy is very convenient for those who have not reached their full earning potential, but have dependents to take care of.

Suppose, you are going to buy a term life insurance policy. Its cheap life insurance rates suit your budget for the time being. Simultaneously, you realize that you are simply wasting your money that way, because not very many people actually die within the term and chances are there you will not either. In that case, you will be paying premiums, however low they may be, for thirty/thirty-five years and at the end of the years you will have nothing show for them. All your hard-earned money will seem wasted.  At the same time, you cannot afford to keep your family unprotected.

Well, where there is a problem, there is a solution. You buy term life now, because it is all you can afford  for the time being, but attach a conversion option to it, so that when you can afford higher premium, you can convert it into a permanent life insurance policy that provides investment opportunity as well as life coverage. You can also buy separate plan instead of converting your old term life insurance. After all, you will have to pay slightly extra for attaching the conversion option to your plan.

You can, but suppose you develop some kind of illness that will make you uninsurable; the insuring carriers will not sell you any new product. They are here to do business after all. However, they cannot stop you from converting your plan even then, if you have that conversion option attached. Therefore, buy term life for dependent care if you cannot afford anything else, but keep every options open. That is called prudence.