Think you need life insurance, but struggling to decide whether you should purchase term life insurance or not? Let Insurify’s guide to term life insurance help you out.
In short, term life insurance pays a death benefit (a predetermined amount of money) to your dependents should you pass away during the policy term. Unlike permanent life insurance, term life insurance does not last forever. However, it is almost always cheaper and, for many people, the best option.
Once you pick a policy amount and time period for coverage, you can start getting quotes. With online insurance comparison site Insurify, you just need to answer a few questions and then you can compare offers side by side.
Term life insurance works by covering you for a length of time of your choosing—usually 10, 20, or 30 years. If purchasing term life insurance, you should choose a term that covers the years for which your family will need financial support most. This is often when children are growing up and you are paying off a mortgage and other debts, such as student loans. If you pass away during the term, your beneficiaries receive the guaranteed death benefit. If you don’t, your contract with the insurance company ends at the end of the term and they keep the money you paid them over the years. Though this may seem unfair, it is the primary reason term life insurance policies are so much cheaper than permanent life insurance policies.
As long as you pay the monthly premium, you remain protected. However, a lapse in payment has the potential to terminate your policy. This would leave you without insurance and needing to apply for a new policy, which would likely be more expensive. Making your life insurance premium a priority payment will help you avoid any missteps.
Life insurance, term or otherwise, is especially important during those periods in life. If you were to pass away, your debts and any bills you covered would be passed on to your family. Life insurance makes it so that these costs won’t burden your loved ones.
You know that life insurance policies fall into two general buckets—temporary (term) and permanent. But did you know that not all term life insurance policies function in the same way? There are five types of term life insurance, each with their own unique features.
Term life insurance is much more affordable than permanent forms of life insurance, such as whole life insurance. Term life policies offer the maximum coverage for least amount of money. If you are younger and in good health, you are typically eligible for much lower rates; assuming you get the standard level term life insurance, these rates won’t change for the length of your term.
For the majority of situations, 10- to 30-year guaranteed level term policies suffice.
The main benefit to whole life insurance is that it has a cash value and lasts your entire life… although it comes with significantly higher costs. For most shoppers, term life insurance is sufficient. However, if you want to know more about the distinctions between policy types, there is a lot of information out there to help you learn. Depending on your current situation and personal preferences, though, there are a few key distinctions that might make one better than the other for you.
Term life insurance is probably better for you than permanent life insurance if you don’t have dependents who will need financial support for their entire lives, such as a special needs child, don’t plan on leaving a financial legacy for your family or charity, and don’t expect to die with an estate that would leave your family with an estate tax burden.
Congratulations! You have decided to take a big step in protecting your loved ones. You should now have a better understanding of the coverages and limitations of term life insurance and can make an educated decision moving forward.
If you want to learn more, check out the Insurify blog, and if you want an easy way to compare quotes side by side, you are just a few questions away. Once you purchase the policy for you, sit back, relax, and enjoy that newfound peace of mind.