When Is Term Life Insurance Right for You?
Many of us believe life insurance lasts for life. After all, it is called “life insurance.” But that’s not always the case. Some life insurance policies last for a shorter period of time, and these types of policies can be very useful.
Whole life insurance policies stay in effect for your lifetime, as long as you pay the premiums. Such policies are appealing to people whose dependents will always need to rely on them financially.
On the other hand, term life policies can last for your lifetime, for a limited period of time, or for a specified term. With a 15-year term, for example, your beneficiary will receive the death benefit if you die anytime during the next 15 years. Term life insurance policies are usually less costly than whole life insurance policies, because a limited term presents less risk to the insurance company.
The right term for you Term life insurance may work better for you than whole life if your dependents won’t need to rely on you financially for the rest of your life. For example, if your children will be graduating from college and are likely to get jobs in five years, a five-year term policy might make sense. Or you could select a 10-year term to give them a cushion while becoming established in their jobs. Many terms are available, depending on the time frame that works for you.
Term-life insurance may present problems when you want to reinsure. For example, if you have a heart attack during the term of your policy and want to reinsure when the term expires, you will have to reapply for a new policy. However, your current health condition may make that difficult and expensive.
Some policies offer a feature called guaranteed reinsurability to address this problem, so discuss this with a Jennifer Lang Financial Services agent if you decide to explore purchasing term life insurance. Contact us today.