Understand the Benefits of Term Life Insurance Policies
Many people overlook the need for life insurance because they can’t see the value of a product that may never give them any financial return on their investment. It’s not a pleasant experience to think about passing away unexpectedly and leaving our family to look after themselves. It may feel as though we’re betting on ourselves to pass away early. So how do you decide whether life insurance is a good choice for your family? To really understand why paying for life insurance is a solid financial choice, you need to think about the value a term life insurance plan can add to your family’s security. A term life insurance plan is more than a financial safety net; in fact, the life insurance benefits are numerous and range from insuring your family’s future to giving you peace of mind.
The Advantages of Life Insurance
There are many advantages of life insurance that can make it fit many situations and budgets. Here are just a few examples of life insurance benefits provided by a term plan:
- The most affordable type of life insurance
Term life insurance offers the most affordable premiums. Term life plans only provide coverage at a guaranteed level premium for a set period of time, and they only pay out a death benefit if the insured passes away while the premiums on the policy are paid. Note the distinction that while the policy may still be in force after the end of term for the guaranteed level premium; the payment of a much higher premium would be required after the term of the policy ends. Why is this important? It’s one of the reasons that term life insurance is so affordable—as the risk of the policy paying out is limited by the term duration, the insurer is able to keep the premium rates much lower. This means that you can get a high level of coverage while staying within your budget.
- Coverage for up to 35 years
Term policies offer a flexible way to get coverage for long periods. Many of the financial stresses people like to leave coverage for only last for a fixed period. Among these predictable, finite expenses are mortgages, childcare costs, and college tuition fees. Term insurance enables you to get fixed length plans that last as long as your financial obligations. This means that you only pay for the coverage you need for as long, or short as you need it. Common policy lengths range between 10 and 30 years.
- High death benefit amounts
One of the best life insurance benefits is the high level of coverage available. The high death benefit amount lets you protect your family from a wide range of financial obligations such as mortgages, debts, living expenses, income loss, and education costs. The combined costs of these life expenses can quickly add up. Term plans allow you to provide for all of these expenses instead of having to prioritize which costs you get coverage for.
- Peace of mind
We share our lives with our loved ones and watch them grow and change every day. We provide for and care for them throughout their lives and it’s easy to worry about who’d look after them if you weren’t around. One of the non-financial life insurance benefits is the peace of mind in knowing that your family is protected when you’re no longer around to provide for them. Term life insurance can provide a financial lifeline to help your family to maintain their current quality of life.
- Protection for living expenses
Day-to-day expenses are often overlooked when people think about purchasing life insurance. It is easy to put more importance on big-ticket items like mortgages and neglect ongoing expenses. Term life insurance is a great way to replace your income so your loved ones can cover day-to-day expenses without worrying where the money is coming from upon your passing.
- Coverage for terminal illnesses
Some policies allow you to add riders or extra coverage that will give your policy additional benefits. One example is coverage for terminal illnesses. If the policyholder passes away during the term of the policy, the insurer will pay out a portion of the death benefit to help the family get through the financial difficulties associated with this stressful time. The rest of the death benefit will be paid out when the policyholder passes away.
Common Uses of Term Life Insurance
People take out a term life insurance policy for numerous reasons. One of the many benefits of term life insurance is the flexibility to fit your coverage needs. As the policy length and the coverage amount can be adjusted to match your coverage needs, it can be used to cover a variety of financial obligations. Some of the common uses include:
- Coverage to pay off remaining mortgage balance
- A fund to cover college education costs
- Money to provide for funeral expenses and other end of life costs
- Income replacement to ensure day-to-day expenses are provided
- Protection from medical costs
- Money to pay off existing debt
- A fund to pay estate taxes
- A financial boost to help a business get through the transition process
Calculating Your Term Life Insurance Coverage Needs
The first step in finding a policy that will bring the most term life insurance benefits to your family is to calculate the amount of coverage you need. It’s easy to under or over estimate the size of death benefit needed to provide a solid source of financial protection for your family. To get an accurate idea of the right amount it’s vital to work through your current living costs like utility bills, food costs, and childcare, and future obligations, such as college tuition expenses. You should also add in any large financial obligations like debts and mortgages. In addition, you may also want to replace your income for a certain time period to give your family time to get back on their feet financially.
Finding The Right Term Life Insurance
IntelliQuote offers an online quoting platform to help you find the best coverage for your needs. We partner with only the highest rated insurers to ensure that you get a high quality plan that will protect your family for many years to come. Use our online quote form to browse quotes in the comfort of your home, today. We’re here to help you utilize the advantages of term life insurance to protect your loved ones.