There are many reasons to buy term life insurance – and just as many benefits. Term life insurance is a great way to protect your family even if you’re young and healthy and don’t need an expensive permanent policy. When combined with other types of insurance, the term can fill some important gaps in your overall financial plan. Here’s a list of the top six reasons you should get term life insurance to help your family:
Stay Covered While You Pay Less Than You Would for Whole Life Insurance
One of the main reasons you should get term life insurance instead of whole life upfront means lower premiums, easier underwriting (as you would be insurable), and no long-term commitments. Since term policies only last for a set period of time, there’s no risk that rates will go up steeply as you get older.
Cover a Financial Burden Such as a Mortgage, Car Loan, or Educational Expenses
You can use term life insurance to protect these large debts from being left unpaid if something happens to you. For example, term life that covers enough of your outstanding car loan lets your family keep driving the same car after you’re gone. The benefit amount should be just enough to pay off all outstanding debt and provide for funeral expenses – but not much more. Keep in mind that term life is generally inexpensive because it doesn’t include cash values or dividends – so don’t expect the term to fund college educations unless you buy a very large policy!
Provide an Inheritance for Your Family
With term life insurance, you can set up a term policy that builds value over time. The death benefit will be larger in the future than it is today due to its growth, but term insurance doesn’t have any cash value during your lifetime. That means term life is best when you want your family to benefit from the policy only after you die, not before or during your life.
Protect Your Business Against Financial Losses Caused by Key Person Events
If someone essential to your business were to pass away unexpectedly, term insurance can help ensure that you’d still retain their important skills and knowledge of how things work within the company. This is especially important if they’re making a salary you couldn’t afford without them! While this example refers specifically to business owners, term insurance is equally valuable for homeowners with key person events, too. For example, term life can protect you against the loss of a vital child who might earn money for the family doing something like taking care of an elderly parent or working full-time while attending college.
Protect Your Family Against Potential Inheritance Tax Liability
One way term life is different from term policies issued in previous decades is that term life now follows the federal tax rules to keep premiums low and benefits high. Because term life insurance accumulates cash value to pay for future growth, it’s not always as tax efficient as whole life – and term policy values must be included as part of your federal estate when you die since the term does grow in value over time.
Gain Peace of Mind That You’ve Got a Safety Net for Your Family
Remember that term life doesn’t build cash value and it’s not the whole life. Instead, one of the main reasons you should get term insurance to help your family is that it has very affordable premiums and the lowest expenses of any type of permanent insurance. Because the term is so inexpensive, it can be canceled without penalty at any time – which means you’re free to switch back to something else if your needs change as time goes on (but the term might still be better than nothing!).
That said, term life is only as good as the company you buy it from – and you’ll want to make sure they’re financially strong enough to be there when you need them most. Coverage should also include broad protection against death by accident or injury, not just death by natural causes.
Because term life insurance is so affordable, it’s very easy to buy more terms when you need additional coverage in the future. You’ll want a term that doesn’t have any exclusions or limitations since these can reduce the number of your benefits in a way that makes term coverage less valuable than whole life.
It’s also possible to convert term policies into another type of permanent plan if your needs change over time – but this does increase the cost of term insurance dramatically! Before converting term coverage, make sure your family won’t be worse off with something else instead.
The Bottom Line on What Are the Benefits of Term Life Insurance for Your Family
We hope that these 6 reasons why you should get term life insurance to help your family were helpful in making your decision. When you’re ready for term life insurance quotes, remember that price isn’t the only important factor. You’ll also want term life that’s simple, transparent, and fair – which means term coverage with no exclusions or limitations, plus term life quotes without fine print, hidden fees, or lowball rates to trick you into buying term insurance that isn’t really quite as good as it looks.
When you’re ready for term life insurance quotes, remember that price isn’t the only important factor. You’ll also want a term life that’s simple, transparent, and fair.
If you are looking for comprehensive life insurance to cover you in the event of a catastrophic accident to protect your family, contact us today at 866.274.0746 or go here to submit your information for a callback.