Do you have a need for life insurance? Unsure of what type of life insurance is right for you? There are many types of life insurance policies, but they generally fall into two categories - term and permanent. Permanent life insurance is just what it sounds like. The coverage lasts for your entire life, assuming you make the required premium payments.
With term insurance, the coverage is temporary. You pay premiums for a set period, like 10, 20, or 30 years. If you pass away during that time, your beneficiaries get a death benefit. When the term expires, you stop paying premiums and you no longer have death benefit protection. Why would you want protection that is only temporary? There are a few situations in which a term policy makes sense. If any of the following sound familiar, you may want to reach out to a life insurance agent for a term quote.
Your need for coverage is temporary
Sometimes people buy life insurance for a very specific reason that is temporary in nature. For example, you may want coverage while your children are young and rely on your financial support. Once they're grown, you may not need coverage anymore. Or perhaps you have purchased a home with a mortgage. Very often, life insurance is a condition of getting approved for the mortgage. You may only need the policy while the mortgage is in place. In these situations, a term policy can make sense.
You have a limited budget
One of the key differences between term insurance and permanent insurance is that term policies are usually more affordable than permanent policies. This is for two reasons. One, of course, is that the coverage is temporary instead of permanent. The other is that permanent policies accumulate cash value that can be used at a later date. Term policies don't have cash value. If you have a limited budget and cash value accumulation is not a priority, then you may want to consider a term policy.
You don't know whether you'll need a permanent policy
Most term policies have a feature that allows you to convert the term policy to a permanent policy. The premium is changed to reflect a permanent policy at your current age. However, you don't have to go through underwriting again. That could be helpful if you've since developed a health condition that would impact your approval. You can convert the term policy into a permanent policy at your original health rating no matter how your health has changed.
Ready to see if term life insurance is right for you? Contact a life insurance service today to get quotes on term policies.