Term life insurance offers one of the simplest ways to protect your loved ones in the event of your passing. It can also provide peace of mind. Mortality cuts well beyond six feet and leaves a trail of expenses and heartache in its wake. Knowing life is short, and may be taken away at any moment, it reinforces the desire to care for loved ones.
Term life insurance pays out a guaranteed benefit when you die during a specified period of time. Say, for example, you buy a 30-year term life insurance policy and die before the 30-year timeframe ends, your family will receive a death benefit to help with financial costs. This helps your beneficiaries pay for expenses previously covered by your income.
Two general types of life insurance — term life insurance and permanent life insurance — exist. Term life policies provide an attractive life insurance option for several reasons.
Reason 1: Term Life Insurance Offers Affordable Coverage
Term life does not accrue a cash value like a whole life insurance policy. Since it only pays a death benefit, term life insurance is very affordable. Especially for younger individuals. The average rate for a $250,000, 20-year term life insurance policy purchased by a 30-year-old woman runs less than $20 a month.
Reason 2: Term Life Insurance Provides Multiple Options
Term life insurance options range both in length and amount. Terms from five, 10, 15, 20 and 30 years are typically available. You can also select between different amounts of coverage, with death benefits of $250,000, $500,000 and $1,000,000. All of these options provide the opportunity to select the right insurance policy for your family. Study options closely to ensure your beneficiaries will be covered in the event of your death. You typically have the ability to renew your policy after the term ends. However, you will renew at the rate for your current age and health status. Keep this in mind when deciding on a term length.
Reason 3: Term Life Insurance Provides Additional Coverage
Individuals may also choose to take out a term life insurance policy as a supplement to a permanent policy. Perhaps you want to pay off your mortgage or fund your kids college education if you die. You can buy a term life insurance policy to cover your 30-year mortgage or a 15-year policy for your grade schoolers education.
Reason 4: Term Life Insurance Gives the Ability to Convert to a Whole Life Policy
Most term life insurance policies have a provision to convert to a permanent policy when needed. This means you pay lower premiums when you are young and in good health. But you have the option to change to a whole life policy as you age or your health takes a turn.
Death is inevitable. For many, the thought of leaving their families protected provides a deep sense of security. Term life insurance provides an economical, flexible way to provide for loved ones after your death. To learn more about term life insurance and uncover a policy that fits your needs contact a SelectQuote licensed agent.