Today more than ever it seems like the product offerings in life insurance are never ending. It’s important for you to have a handle on the types of policies offered. Over the next few weeks we are going to briefly highlight the different types of life insurance and when each may be a good fit.

 

Term Life

This is probably the most known life insurance and is definitely the most affordable. When we look at a term life insurance policy, we are simply choosing a death benefit amount and how long we want to have this. The maximum for a term policy is typically 30 years. A great rule of thumb to follow is – the older you are and the longer the term on your policy, the more expensive it will be. Let’s say you chose a 20 year term policy with a $250,000 death benefit. With term, the only way this policy is going to pay out is if you die within that 20 year period. During the 20 years you will pay a constant rate that is determined when the policy is issued. After the initial term (20 years) is up, you do have the ability to continue the policy on a year by year basis, but we typically see premiums inflate more than double and can continue to rise year by year.

When to buy: Term life policies can fit into many different categories and are really suitable in multiple instances. Many times we will see term policies being used in these situations:

  • Younger couple on a limited budget looking to replace income upon death for a mortgage and/or student loans
  • Someone with a heavy amount of debt right now that wants to be able to have this paid off upon death and not leave as a burden to beneficiaries
  • Someone taking out a business loan will often have to take out a term life insurance policy and use it as collateral for the loan
  • Someone looking to get coverage right now to avoid future insurability issues and on a budget

 

Looking for a life insurance quote or have a question regarding your options or insurability?  Contact us today for a local agent near you!  Simply call 1-800-669-3959.