I know I have asked this question: What is Term Life Insurance? Term Life Insurance is one of two major types of Life Insurance Policies one can buy. The other major type of life policy you can get is Whole Life. Similar to whole life, Term Life Insurance comes with different variations designed to help you meet yours and your family’s needs. But simply put, Term Life Insurance covers a specific period of time and then it is over.
Getting Term Life Insurance? Consider Age And Needs
The first thing you need to consider when seeking life insurance is making sure that you buy enough coverage to meet your needs balanced against what you can afford. Life insurance is one expense you really need to seriously think about. As explained in Whole Life Insurance Explained, whole life policies are typically more expensive than term life insurance for the same cash value of each policy type.
For Term Life Insurance, the younger you are, the less cost it will be and the most coverage you will be eligible to obtain. Thus if you are on a tighter budget and are younger the best life policy option for you may well be Term Life Insurance.
Term Life Until The Kids Are Gone And You Retire
Term Life Insurance is coverage that lasts for a set period of time but has no investment provisions like whole life. Your policy, should you decide to get one, needs to last as long as it takes for your dependents to grow up and go out on their own, and until your retirement starts paying.
Apply For Term Life When Your Are Healthy And Renew Annually
Be sure to buy your Term Life Policy while you are healthy because health problems will typically result in you having to pay a higher premium. Similar to other insurance policies, monthly premiums are due and insurance is kept in force as long as these are kept paid. Policies are renewed annually, but you don’t have to re-qualify proving your health condition each year.
An Example Of Cost For Term Life
There are many ways to structure a Term Life Policy. In order to get the proper policy for your situation it is best to meet with an Insurance Agent. The following is a numerical breakdown of costs for a young man taking out an annual renewable term policy. For a man of say 25 years old a policy with $250,000 worth of coverage would run about $200 a year. Premiums increase as you grow older.
For a healthy, non-smoker, 40 year old male, the yearly premium for $500,000 on a term policy would run about $500 a year. For a 30 year old woman, the cost would be about $260 annually.
You can also check the Internet for term insurance information. This will give you more details on terms, insurability requirements, limits, exclusions, etc.
How Much Term Life Insurance Should I Get?
The main reason for insurance is to provide enough coverage to meet the needs of your wife and children so they can stay in their home and continue in their style of living. As to figuring the amount you need to carry, it is suggested that you purchase enough Term Insurance to cover 5 to 7 years of your annual income. Should you have much debt and/or young children, you should increase your coverage to about 10 years of your salary.
In the past, it wasn’t possible to buy term policies for longer than 10 to 15 years, but now they can be extended from 20-30 year terms.
Time and Other Factors to Consider When Selecting Term Life Policies
Take into consideration child care expenses if the remaining parent is working. Are there any other assets to draw upon? How long till the children are grown and leave home? All these questions you need to ask yourself when determining amount of term insurance coverage needed.
If your youngest child is a baby, two or three years old, then you’d need at least a 20 year term or until the youngest is 22 years old. You’ll also want coverage for your spouse because if something happened to her, you, too, would need coverage for child care, household service, possibly babysitting expense, or even a cook, depending on hours of your job and time spent away at work or traveling.
If covering your spouse and you are 35 now, then a 30 year term policy would be necessary. Insurance costs get expensive as you age and sometimes it is hard to get coverage after 65 or 70.
When in the market for life insurance, check around with different companies to compare rates and benefits. Talk with several agents. Internet services can supply information but can’t help with specific circumstances or nonstandard policies unless you pick up the phone and talk to someone. Try to do business with companies with low prices and the terms that suit you and that have a good reputation for paying claims.
Get a Term Life Insurance Quote.