If you have a spouse, children, or both, and your current and future standard of living depends on the money you bring home each month, then term life insurance is the best financial purchase you will ever make! For just pennies a day, you can guarantee that your future is not secured if something unforeseen happens to you.
The purpose of term life insurance
Nothing can be easier than term life insurance. For a set premium, the insurance company promises to pay your beneficiary (the person who is supposed to receive the proceeds) the full amount of your policy.
There is no cash value in this type of insurance policy. You simply decide how long the insurance cover should last and pay the specified premium. The longer the insurance period, the higher the premium.
Here’s an example of a $100,000 policy for a 35-year-old male non-smoker:
A ten-year policy is $7 per month, a twenty-year policy is $9 per month, and a thirty-year policy is $13 per month
Here’s an example of a $100,000 policy for a 50-year-old male non-smoker:
A ten-year policy is $14 per month, a twenty-year policy is $21 per month, and a thirty-year policy is $36 per month
How long do you need life insurance?
Most people need insurance longer than they might think. Consider these reasons for getting life insurance and the appropriate time frame:
Do you have small children and want to ensure that in the event of your premature death (isn’t every death premature?) the tuition fees for your studies will be paid? In this case, a policy with a term of 25 or 30 years would be best.
You have a mortgage on your home and currently need both your income and that of your spouse to make ends meet. Since most mortgages have a 30-year term, I would look for a 30-year policy.
You and your spouse are 50 years old and not married, but both incomes are required to maintain your income standard, including savings for retirement. In this case, a term of twenty or thirty years is ideal.
Buy the cheapest policy you can find!
Regardless of the insurance company, a 20-year, $100,000 policy pays $100,000 in the event of death. Because you’re not building cash value, it doesn’t matter which company you buy from. The only caveat is that you only want to buy from an insurance company that is rated “A” or better by AM Best. These are the companies with the strongest financials. On my website you can buy the rates of the best life insurance companies in the United States.
Shopping is crucial, but prices can vary significantly from company to company. The rates for $250,000 30-year insurance for a 40-year-old non-smoker without a physical exam can range in monthly premiums from as little as $24 with the cheapest insurance company to $36 per month with the most expensive insurance company include. In all cases, the death benefit is identical. My suggestion is to buy the cheapest plan!
If you are healthy – change your plans and save money!
Interest rates on term life insurance have steadily declined over the past thirty years. Just because you bought a 20-year policy five years ago doesn’t mean you can’t save money by switching providers or extend your coverage for the same premium. In contrast to cash value life insurance, you have nothing to lose if you change your plan. But you can lose a lot of money if you don’t switch. And in today’s economy, we need to make our dollars work harder for us!
48% of Americans die without receiving life insurance benefits
While the fact that 40% of Americans die without leaving any life insurance benefits is shocking, an additional 21% of Americans reported that a loved one died without leaving enough life insurance benefits. These statistics beg the question: why shouldn’t an income-producing spouse or parent take out life insurance to cover the future of their dependent?
A study found that many people put off buying life insurance because they found everything very confusing. I have very good news for these people! Term life insurance is easy. You simply select the number of years you want to cover, get a few rates and then choose the cheapest policy.
Another reason many people don’t buy life insurance is because they don’t want to work with an insurance broker. To these people, insurance agents are little more than salespeople, and no one wants to be sold. There is very good news here too. Due to advances in technology, there are sites like mine that allow you to get a quote and sign up without ever having to speak to an insurance agent, unless that’s what you want of course!
Term life insurance has never been cheaper
A 35-year-old non-smoker can buy $100,000 in 20-year term life insurance for $9 a month. The same person can leave their family the same $250,000 20-year term life insurance policy for just $4 more a month.
So don’t hesitate to protect your family’s financial future.
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