When the time comes to look at life insurance and all the different options, it can be challenging to determine not just how much coverage you need, but what life insurance plan is the best option for you. You have two main options for coverage, permanent insurance or term life insurance. Both have their benefits, but one is likely to be more suitable for certain situations.
No matter which coverage you purchase, life insurance is there to protect your loved ones is you were to pass away prematurely. Instead of your family having to cover all the funeral expenses and handling the loss of income, all while mourning your passing, the policy would kick in to help relieve any financial stress. The death benefit, which is the amount in which your policy pays out, would go to the designated beneficiary, those whom you specify that would receive the money.
The difference between term and permanent insurance is how it sounds – one is permanent and lasts your whole life, while the other one lasts for a designated amount of time before expiring. For many families, term life insurance tends to make the most sense, and here is why.
Get Coverage For When You Need It
At first glance, permanent life insurance seems like the no-brainer. Why wouldn’t you want coverage for your entire life? If you think later on in life to you retirement though, there’s a good chance that you’ll have enough money saved up that you don’t need the extra policy to cover any funeral expenses. You are less likely to have any dependents as your children will be on their own.
With term life insurance, you assign how long you want the coverage for (typically either 10, 20, or 30 years). Once the coverage comes to an end, you can re-evaluate your situation and decide if you need to continue with your coverage, or end it.
Adjust Later On
With term life insurance, you can make adjustments to your policy later on in life. Because of the needs of you and your family change over time, whether it be financially or with your health, you want your policy to reflect where you are at in life.
The older you get, the more financially well-off you’re likely to be, as well as your children likely will become more independent. You can then, adjust your policy when your designated term is up, and decide if you need to continue with your coverage.
Have Coverage Only When You Need It
It may seem like a good idea to have life insurance no matter what stage of life you’re at. The thing is though, why continue paying for coverage if you do not need the money? Say you are going to a clothing store to buy a shirt. You wouldn’t spend the money on an entire outfit; you would only purchase the shirt you want.
With term life insurance, it is a similar idea. It allows you to purchase coverage for when you need it the most without spending additional money during the periods when life insurance may not be needed.
Term life insurance offers you the flexibility that other policies do not have. You have more control over when and how much coverage you want. When the time on your policy expires, you either renew your policy or let it expire. For more information on term life insurance, you can request quick quotes here.