Term life insurance basics
No one likes to think about death. And almost as bad, life insurance. There are much more enjoyable things to plan for: vacations, retirement, a shiny new car!
The problem is, procrastinating on that life insurance policy is costing you money.
The older you get, the higher your rates, and the more likely you are to develop health problems which can cause your premiums to be even higher. Conversely, the younger and healthier you are at the time you take out your policy, the cheaper your premiums will be.
But life insurance sounds expensive and there are just too many types to choose from.
First, why do you even need life insurance? Most commonly, life insurance is a way to ensure that your family’s financial future is secure. Not that you want to think about it, but if you die, you want your family protected. Life insurance can help pay off debt in the form of mortgages, car payments, and credit cards. It can also be used to replace lost income or cover future expenses like a child’s college education.
The simplest and least expensive form of insurance is known as Term Life Insurance. This just means that your insurance will last for a set period of time (the term) and your monthly premium will remain the same for the entire lengthof the policy, as will your death benefit. Depending on your needs, you can choose a term of 10, 20, or even 30 years. Ideally by the time your policy term runs out, you will no longer need the insurance.
Plan to purchase a policy that can pay off your major bills (e.g., your mortgage) and cover lost income to your family for at least five years. As for the term, better to err on the side of caution and take out a longer policy (which you can cancel when the time is right) than to run out of insurance too soon and have to renew at a higher rate.
If you have a family that depends on you, it’s a pretty sure bet that you also have some debt built up. Don’t let the simplicity of term life insurance fool you. Term Life Insurance is inexpensive and worth its weight in gold. Now may be the time to take those first important steps. Call around and get some quotes. Nothing fancy. Just a little peace of mind.
