What Term Life Covers

Term life insurance is a tough topic to talk about with your loved ones, but an important one if you have family members or dependents that rely on you for financial support. In short, term life insurance provides money to your beneficiaries (typically your family) in the unfortunate event that you pass away while your policy is in force. If there are people in your life who depend on you to help maintain their livelihood, whether financially or otherwise, you may be wondering how they'll be taken care of if something were to happen to you. Term life insurance could be one answer to that question, as the benefits of a policy could help cover the following expenses:

Burial Expenses

The average funeral costs between $8,000 and $10,000 in the United States, and according to the National Funeral Director's Association, that number has risen every year since 1960. A term life insurance policy of $15,000 could help cover the expenses of your funeral, plus provide a small financial cushion for your beneficiary. For more information, check out our infographic detailing the cost of a traditional funeral .

Outstanding Debts

There are no hard and fast rules when it comes to debt and death, reports U.S. News and World Report. Depending on how your accounts are set up, the state you reside in, and the type of debt in question, certain family members could be on the hook for paying back your debt, says David Mendels , a certified financial planner with Creative Financial Concepts in New York. Here are two types of debt that could be lessened with the benefits of a term life policy.

Credit Card Debt: If you leave behind thousands of dollars in debt on credit cards, your family won't be on the hook to pay it back...unless one of them is a co-signer on the card or a "joint cardholder." A parent may co-sign with a child who's beginning to establish their credit, or an adult child may co-sign with their elderly parent to help keep track of expenses. Either way, credit card cosigners can inherit credit card debt, and this is a debt a term life policy could help pay off.

Auto Loan Debt: Car payments fall into a similar situation. If you pass away while you're still making car payments, the vehicle could be repossessed. If there is a cosigner on the vehicle loan, the cosigner will be expected to continue to make payments. The benefits of a term life policy could help settle outstanding auto loan debt.

Everyday Living Expenses

Take a look at the expenses in your family's monthly budget or a even a bank statement from last month. There are likely charges for gas, groceries, cell phone bills, cable bills, rent, electricity, water--the list goes on and on!

Without your income, could your family continue to pay these bills and make these kinds of purchases? Could your wife buy groceries worry-free? Could your kids buy new coats in winter? Nearly ⅓ of Americans feel that the loss of the primary earner in the household would be felt within the month. Another ⅓ have no idea, reports According to the 2015 Insurance Barometer Study . During a time of emotional stress, the benefits of a term life policy could help ease financial stress.

In particular, the benefits could help bridge the financial gap while other family members seek employment. The share of two-parent households in which both parents work full time now stands at 46%, up from 31% in 1970, reports the Pew Research Center . What's more, a 2013 survey reported that six in ten Americans believe you need dual incomes these days to afford your dreams. Without two incomes, or your income in particular, consider how would your family fare financially each month. Would there be financial stress?

Care for a Parent or Sibling

What if you're single, with no kids and no spouse? Think singles don't need life insurance? Think again. If you're taking care of parents, grandparents, or siblings, having a life insurance policy could help make sure that your dependents are cared for in the event of your death, or at least until another family member can make arrangements to take care of them.

When Term Life Insurance Coverage Is Canceled

Are there situations in which your term life insurance coverage could be terminated? Unfortunately, yes. While termination guidelines vary by insurance provider, there are some general scenarios that could lead to your policy being terminated or cancelled. For example, your coverage could be canceled if your down payment or one of your premium payments does not clear a financial institution, or if it is discovered that you answered a health-related question falsely when applying for your policy.

Life insurance is a simple answer to a very difficult question: How will my family manage financially when I die? If you're considering term life insurance, give one of our knowledgeable representatives a call at 1-877-GO-DIRECT (1-877-463-4732) . Our representatives know that no family is the same, and they're happy to talk you through the different expenses that your term life insurance policy could help pay for.

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*Policy terms and conditions apply. Individual term life insurance by Direct General Life Insurance Company, Nashville, TN. Policy 58TL02010713. Premium and other terms will vary by state, the insured's age, and the selected coverage. *Material in these articles is for general information or entertainment purposes only. Direct General does not endorse and is not affiliated with any of the companies or apps listed in this article. Direct General is not responsible or liable for the availability of links to websites or resources, or for any content, advertising, products, services or other materials on or available through these websites or resources. Any references to third party rates or products are subject to change without notice. Trademarks are property of their respective owners.

What Term Life Covers
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