They say that life insurance is for the living and so it is. Buying life insurance coverage is the responsible thing to do to ensure that when you die,your funeral and burial costs won’t be a burden to your loved ones. Buying life insurance is also the responsible thing to do to make certain that those you leave behind, will be provided financial means to continue their life style. The higher your family’s life style, the more life insurance coverage you need in order to replace what you provide the family.
Term Life Insurance is the most popular type of life insurance policy today. These policies are more affordable than whole life or universal life insurance allowing the purchaser to acquire higher amounts of coverage for that period of time when they most need it. For example if you have a family and a mortgage, your family depends upon you to provide for them and if you died unexpectedly your family may be left unable to pay the mortgage or provide for themselves. If your children are young, they will be dependent upon you for at least 20 years and your mortgage will likely be for 30 years. A general rule is to buy ten times your annual income in life insurance coverage for the 20-30 years of time that you have dependents and a mortgage. A million dollar term life insurance policy locked in for a 30 year term is usually more affordable than a whole life policy and most term life policies can be converted to permanent life insurance coverage during the conversion period without having to prove insurability.
Term life policies are sometimes referred to as temporary life. There is a fixed period of time (the term) when the premium is level, but after that time, either the premium increases yearly to the point where it becomes unaffordable or the policy terminates. It is wise to re-evaluate your life insurance from time to time so you can increase, decrease, or convert the coverage you have as your life situation changes.
Let’s look at an example. Tom is a healthy thirty-year-old father of two small children. He and his wife have a $150,000 thirty-year home mortgage. He makes $75,000 a year and his wife makes $25,000 working part-time so she can spend more time with the children. Tom should consider purchasing a thirty-year term life policy with a $750,000 death benefit. Since Tom doesn’t smoke or use tobacco and has a careful driving history his monthly cost for his life insurance may be $50-$100 depending on some other variables. At this cost he can afford to provide good protection for his family with a good life insurance policy, and have that low rate locked in for thirty years. Later, if he has more children or buys a bigger house he may consider either increasing his coverage or buying an additional policy for another $250,000 or more of coverage. As he gets older and his children get out of college he may consider converting his policy to permanent life insurance coverage and reducing the death benefit to whatever his needs are at that time. He won’t have to prove insurability even if his health has become poor, but the new premium will be reflective of his older age and the fact that permanent life insurance is always more expensive than term life insurance. But at least by converting his term policy to permanent life insurance, he makes certain he has provided financial means to settle his estate, cover his burial, and leave something for his wife or children depending upon who is still surviving at the time.
Call Rhett Schack for a consultation and what life insurance will best fit your needs and get a free quote. 817-261-1502. firstname.lastname@example.org or click here and run a quick quote for yourself…