When shopping for life insurance, you’ll have many decisions to make. One of the most important decisions is choosing between term life or whole life insurance. Each policy type has specific advantages and considerations, so it can be hard to decide which is the right fit for your circumstances. If you’re leaning towards term life insurance, you’re not alone. This type of coverage is popular due to its affordability and flexibility, but there’s still much to keep in mind before committing to a term policy. Let’s walk through the different factors you’ll need to consider when buying term life insurance.
Term Life Insurance Offers Affordable Coverage
One of the greatest incentives to purchase term life insurance is its affordability. Because you only buy as much coverage as you need, term life insurance is arguably one of the most affordable life insurance options. While it doesn’t build a cash value like permanent life insurance does, it’s often going to be less expensive, helping offer peace of mind if you’re unsure how life insurance payments will fit into your budget.
Term Life Insurance Provides Multiple Policy Options
Because you only buy term life insurance for a specific period of time, it offers flexibility that you can tailor toward your specific financial goals. Typical term lengths are 10, 15, 20, 25, and 30 years, so whether you’re paying off a mortgage, saving for retirement, or trying to put children through school, it’s easy to select a term that aligns with your short- and long-term financial obligations.
Term Life Has Several Key Advantages
Some of the most prominent key features of term life insurance are its affordability and simplicity. However, those aren’t the only advantages of this policy type. Other benefits include:
Flexible payment options
Pre-existing condition-friendly
Tax-free death benefit, ensuring your loved ones won’t pay taxes on the policy’s payout
Fixed premiums throughout the entire length of the term
Peace of mind your loved ones are financially protected in case the worst were to happen
Term Life Insurance Can Be Converted to Whole Life Insurance
Many term life insurance policies will include a built-in conversion rider that allows you to simply make the switch to a whole life insurance policy. There can be many benefits to converting your term life insurance policy to a whole life insurance policy, including:
Skipping the medical exam: Since you already completed a medical exam for your existing term policy, there is typically no medical exam required when converting and you shouldn’t have to go through the underwriting process again. However, this could vary from policy to policy.
Partial conversion: If your life insurance company allows it, you might be able to convert just a portion of your term policy into a whole policy.
Cash value: With a permanent life insurance policy, you have the opportunity to build a cash value alongside the death benefit.
Lifetime coverage: As the name suggests, permanent life insurance provides coverage for the rest of your life, which can be an added benefit for those looking to provide financial support to their family when they pass.
Ready to look at your term life insurance options? Let SelectQuote help.
If you’re interested in purchasing term life insurance but aren’t sure where to start, work with SelectQuote. We have nearly 40 years of experience helping people like you find affordable term life insurance. In just minutes, our licensed insurance agents will gather a variety of term life insurance quotes from trusted carriers, helping you compare your options so you can find the coverage you need.
