How does a term life insurance policy work?
Policy owners pay a premium monthly in order to have a death benefit (the amount of money paid out to beneficiaries) when the insurance owner dies, or insurance owner becomes permanently ill or disabled. As long as the policy is active (insurance premiums paid), the insurance company will pay out the death benefit money in any of those two instances mentioned. Term life insurance does not have cash value, only death benefit component.
Who should consider term life insurance?
Parents/caregivers, business owners, philanthropists and homeowners. Anyone who has people that depend on them or assets to protect.
What happens if you outlive your term life insurance?
Term life insurance is represented in terms (years) of for example 10, 20, 30, 40. If you outlive your term life insurance, you will need to renew your existing policy or get a new policy. Of course, the older you are term life insurance may not be as simple when you were young and healthy, so getting a longer term such as 30 or 40 years may work best for most.
How long should I carry term life insurance?
Typically, you should carry term life insurance your entire life. As you age, circumstances may change so you may not need as much life insurance as you would when you were younger, or your children were younger for example. It depends on your life circumstances and goals and should be re-evaluated regularly throughout the span of your life.
Are term life policies worth it?
Yes, especially for those who are parents/caregivers, business owners, philanthropists and homeowners. Term life insurance can help cover costs of mortgage, children’s education, funeral costs, etc when you pass away.
Does income matter for life insurance?
Income can help determine the amount of death benefit you may need for your policy. In order to be able to pay your premiums, it is beneficial to have consistent income, but premiums can be adjusted based on your budget.
