Unlike whole life insurance, term life insurance covers a specific number of years. This duration of time depends on the policy you select. It may be for five, 10, 20, or more years. When shopping for policies, you'll find this type of life insurance tends to be less expensive than whole life insurance, which remains in place as long as you continue to make payments on it.
Whole life insurance provides a significant amount of protection and is the ideal choice for many people. But for those who do not feel they need insurance on a long-term basis, term life insurance can be a good option. Here are three instances in which you may wish to have it.
- You have dependents. If you are the breadwinner in the family, which means your family depends on your income, then you should maintain life insurance as long as you have dependents. This ensures that if something happens to you, your family can maintain the same quality of life in your absence.
- You have significant debt. If you have a mortgage, for example, maintaining term life insurance throughout the life of that mortgage can ensure your loved ones can pay it off if something happens to you.
- You have specific financial goals. If you have financial goals in mind, such as investment strategies, you need to be sure a policy is in place to protect you in case you don't have time to meet those goals.
There are many other reasons to choose a term policy, including the flexibility, the low cost and the overall ability to provide your loved ones with peace of mind. While it may be more beneficial for some people to choose a whole life insurance policy for estate planning goals and long-term security, not everyone has to buy that policy to gain financial security. Consider the value that term life insurance can add to your life and, with the affordability that the policy offers, it may be the best decision you can make for your family right now.