If anything is gloomier than thinking of your own death, it's thinking of your death in terms of a budget. While you want your dependents' needs to be covered, the simple fact is, you cannot always afford permanent life insurance. Nor is it always the best choice.

What do you do?

Well, you might think about Term Life, the least expensive form of life insurance available. In fact, the premium for term life is typically four times less than an equivalent permanent life plan. That's because there's no cash value buildup - the premium is applied to pure life insurance - and a term life policy expires within the time you choose to mirror your personal coverage needs.

Generally, anyone from eighteen to eight-five years of age can qualify for term life. And happily, there are many underwriting classifications for term life, so people with a wide range of health conditions can purchase the product.

As for your choices, first, there's Level Term, a product that provides level death benefits and level premiums during the length of the policy. Second is Annual Renewable Term, a great product if you need inexpensive coverage for only a few years - this offers the cheapest coverage going in, but the premiums increase every year while the benefit remains the same. And lastly, there's Decreasing Term, a product with level premiums, but a decreasing death benefit.

Most term life products Most term life products are renewable. Meaning, after the initial contract period - say a twenty-year level term - the policy will renew yearly without proof of insurability, as long as you pay the premiums. This is important if you need to extend your coverage, especially if you would otherwise be uninsurable due to a serious chronic disease, and you remain at the same rate classification. An important note: even though your coverage stays in force, your premiums will go up annually, however, those rates are disclosed when you purchase your term life policy.

Also, many term life products are convertible. In other words, you can convert your term insurance to a permanent life plan. While this is not always cost-effective, it may be the only way you can maintain coverage should you become otherwise uninsurable. Like other forms of life insurance, term life insurance provides a specific amount of money to be distributed to your beneficiaries upon your death, but only if your death occurs during the contract period. You should not buy Term Life if you need life insurance that will provide a death benefit no matter how long you live.

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