While term life insurance may not necessarily be “better” than whole life insurance, term is definitely the right choice of coverage in most situations. Term life insurance is coverage that lasts for a specific period of time. Permanent coverage, whole life being the most well-known, lasts your entire life. Because the main goal of life insurance is to protect your loved ones during their most financially-vulnerable years, a life insurance product that you only pay for during a specific period of time makes the most sense – in most cases.
When Term Life Insurance Is Better
If you have a young family and a mortgage, your loved ones are in their most financially-vulnerable years. Your spouse and children are dependent upon your income. If you were to die suddenly, would they be affected financially? This is where term life insurance can be lifesaving.
Are you a good saver?
If you’re a good saver, and by this I mean you regularly contribute to a savings and retirement account, purchasing term life insurance to protect your family for a definitive number of years is ideal. Your family has the protection they need, when they need it, and then the protection drops off later in life when your children are grown, the mortgage is paid down, and you have a healthy savings. Like most types of insurance, term life insurance is a product you hope you never have to use.
Are you on a tight budget?
If you already have a tight budget, term life insurance is ideal because it’s quite inexpensive. Imagine you died without life insurance, how much tighter would your family’s budget become without your income? Even a small $100,000 policy can go a long way for a struggling family – and its premiums won’t affect your monthly budget too much. Even if you’re not in stellar health, a $100,000 policy is affordable.
Estimated Cost of a
20-Year $100,000 Term Policy
for a 35-Year-Old Male Risk Class Monthly Premium Preferred Plus
(Best Health Class) $9 Preferred $11 Standard Plus $14 Standard $15
Do you have outstanding loans?
Term life insurance is ideal if you have loans because you can dictate how long you want coverage for. As an example, if you want to apply for a