How would your family’s daily life change if the unthinkable were to happen? Think about the things you are financially responsible for in your household. Does the list include a car payment? Rent? Mortgage? Financial responsibility can reach far beyond your control, which could be worrisome for the ones you love.
So, when is it best to buy life insurance? To find out, start by exploring your options and deciding what you need from a life insurance policy. Term life insurance is often a good way to meet in the middle—it’s an affordable way to help your family out financially when they could need it most.
How does term life insurance work?
Term life insurance works like this: first, choose a policy amount. This is the amount your beneficiary or beneficiaries will receive in the event of your death, as long as the term of your policy has not lapsed.
Then, choose a policy term. This is the window in which your coverage will be in force. Different insurance carriers offer different term periods anywhere from one year to 30 years typically. As long as you pay the premium during the term, your term life insurance policy will stay in force and your beneficiary or beneficiaries will receive the proceeds from your policy, usually tax-free, in the event of your death.
When should you buy term life insurance?
A low risk of death, but high status of responsibility, is a good reason to choose term life insurance. Although life insurance may seem like a heavy expense for a younger person, if you’re carrying a lot of financial weight for your family it may be a wise choice.
Since term life insurance only covers you for a designated amount of time, you could purchase life insurance for only the period of time that your family is financially dependent on you. For instance, let’s say your kids will only be at home or in school for two more years. You could purchase term life insurance for just this amount of time and gain peace-of-mind knowing that they would not be as financially stressed in the event of your passing. Even if you don't have children, there are circumstances where a single person would need life insurance too.
Always research an insurance provider’s services to find the best options for you. If you need flexible payment options and something that can fit into your budget, make sure you choose a provider that will work with you. Never settle for less when it comes to protecting those you love.