3 Signs Term Life Insurance Is Right For You
Life insurance is important for many reasons. Not only will it ensure your loved ones have the financial means to handle your final expenses, but it will also give you some peace of mind knowing your family is provided for when you pass away. Of course, knowing what type of life insurance policy is right for you can be challenging. This guide will help you understand a few signs that term life is the right answer for you.
1. You Want to Be Insured for a Specific Term
Like the name suggests, term life insurance insures you for a specific term. For example, you may purchase a 10-year term policy, which guarantees you will be insured for 10 years once the policy is issued. The length of the term varies, so you can choose from a few years up to a few decades. If you pass away during the term, the death benefit will be paid to your beneficiary. However, if you pass away after the term ends, and you did not renew or convert the policy, the death benefits will not be paid to your beneficiary.
2. You Are Young and Healthy
If you are young and healthy, a term life policy can be a great option for your life insurance. Basically, when you are young, insurers believe you have time, meaning you are less of a risk to insure. If you purchase a life insurance policy when you are older, the insurer will believe you are a risk, increasing the cost of your life insurance premiums or not even approving you for insurance at all.
When you are young, a term policy is beneficial because you will have time to decide what to do when the term ends. After a decade or two, you can renew for another term at your current age, or you will have the opportunity to convert to a whole life policy.
3. You Want Affordable Premiums
No matter what your age is, term life policies will have more affordable premiums than whole life policies. Understanding why will require understanding the benefits of a whole life policy. Unlike term policies, whole life insurance protects you through your whole life. You would not need to worry about premiums increasing or having the need to renew the policy after a specific term. Whole life policies also earn cash value over time, which is another reason why they are more expensive.
If you prefer the lower premiums, a term life policy will be the better option.