Life insurance enables you to leave money for your loved ones when you die. It can be used to pass on tax-free inheritance, replace your income, cover your end-of-life expenses and more.
About half of Americans carry life insurance, according to the report 2022 Insurance Barometer Study Directed by Limra and Life Happens. There are different types of life insurance in the market but, when a What policy is most appropriate? Read on to learn about five common situations where term life insurance can make sense.
If you’re in the market for life insurance, start by getting a free price quote so you know exactly what to expect.
Before deciding whether term life insurance is right for you, it helps to understand exactly what this type of policy is.
What is term life insurance?
Term life awhich provides a fixed amount of coverage for a specified period of time — such as 10, 20 or 30 years. Once your policy expires, you usually have to go through the underwriting process again if you want to renew your coverage. on the contrary, Insurance can cover you for the rest of your life at a fixed rate. Whole life insurance policies also come with an attractive That can potentially be accessed . For this reason, and because of the duration of whole life insurance policies, they tend to be more expensive than term insurance.
Who can benefit from term life insurance?
Term coverage can make sense in a variety of situations; Especially, when people are on a budget and need cost-friendly coverage. According to industry experts, here are five groups that would likely benefit from taking out a term life policy.
Term life insurance often makes sense for thisThose who are early in their careers, on tight budgets and starting families.
“It’s usually best for … young adults who want to make sure their family is covered in the event of an untimely passing,” says Adam M. Hyers, licensed insurance agent and founder of Hyers & Associates.
He adds, “The idea is that by the end of the term the need for insurance will be much less. The kids are older, out of school and on their own. The house is paid for and the savings/investments are up.”
If you think you could benefit from term life insurance get started by getting a free price estimate now.
Spouse with significant share debt
If you and your spouse have a lot of debt, term life insurance can provide affordable protection when you have a large outstanding balance. “It’s often good practice to secure any debt (car loan, credit card debt, personal student loans, a mortgage),” explains CFP Danny Siniewicz of Hyperion Financial.
Elderly people who want to leave a legacy
Term insurance can also be helpful if you are elderly and don’t have an inheritance to choose from. “I’m seeing an increasing number of older people who didn’t plan to buy term life for retirement because of the low cost. They’re hoping they’ll be able to leave term insurance benefits to their loved ones,” said Natasha. McPherson, CLTC, is a financial advisor at Wealth Management.
Business owners may also face the need for term life insurance. “Banks often require critical man life insurance for companies applying for loans. This protects the bank, ensuring your business can pay the loan if a valued employee dies,” says Chuck Polity, owner of Polity Insurance Agency.
Mike Raines, owner of Raines Insurance Group, adds, “Business owners may also need large amounts of life insurance to keep the business going if something happens to a partner. Immediate death benefits are needed at just the right time.”
Those who want to layer insurance policies
Finally, term insurance can act as aTo help save on your overall coverage costs. Daniel Adams, MBA, CFP, president of CEG Life Insurance Services, explains, “Term life insurance can be beneficial for individuals who purchase a small amount of permanent life insurance for lifetime protection, but need to supplement this amount with permanent life insurance for a limited period of time. The benefit of the policy increases.”
Is term life insurance right for you?
Term insurance can be a good solution in various situations like these five, but it has its pros and cons. While the cost is low, the coverage is not permanent and the policies do not come with a cash value component. If you have any questions or concerns, be sure to consult an insurance agent or trusted financial planner. You can also get a free price quote now or use the table below to compare some of the top life insurance providers.