Written by Natasha Cornelius | Jul 27, 2022
Link to original post link: QUOTACY
Most people purchase life insurance because of love. They have loved ones that could be affected by their death.
Life insurance can be a huge financial relief for those that lose a loved one and need to pay not only the funeral costs, but all of the other day-to-day bills like the mortgage, the credit cards, or the car payment. Or, you may even be thinking ahead about your children’s college tuition, which can also be paid for with life insurance.
If you’ve been thinking about purchasing a life insurance policy, you’ve probably noticed that there are two main kinds of life insurance: term and permanent.
Term Life Insurance
Affordability
The biggest advantage of term life insurance is how affordable it is.
There is less risk for an insurer because the term coverage is temporary. And the younger and healthier you are, the better rate you’ll receive.
Term life insurance rates are fixed when you buy the policy. You don’t need to worry about the insurer raising prices because of age or a health issue.
Customizable
With term insurance, you choose how much coverage to buy and how long you want the policy to last.
Your coverage can last 10-40 years. However, your age can limit term length options. For example, a 60-year-old will not qualify for a 40-year term policy.
A longer term will mean a higher premium. A higher face amount (a.k.a. coverage amount) will also mean a higher premium. However, it’s easy to customize a policy in order to fit into most budgets.
Protection Ends
When your term ends, your coverage ends. Policies often have terms available for 10 – 40 years.
Term insurance is designed to protect your dependents in the event you die prematurely. If you die within the term, your beneficiaries receive the death benefit. If you don’t die, there is no payout.
Term life insurance is great for those that want to financially protect their loved ones for a certain period of time when you feel your family would experience the most financial devastation if you were to die. The payout replaces your income and can help your family pay for expenses that you currently take care of and even future expenses such as college tuition.
Ideally, your need for term life insurance would end when the term expires. Once your children are grown and on their own and you’re nearing retirement, you no longer need term insurance protection.