Life Insurance is a promise to protect your life and the lives of your loved ones. Life insurance can be used to pay for final expenses, outstanding debts, or to leave a legacy such as an education fund for your children or a charitable donation for your community.
Often life insurance is purchased to protect those close to you from an identifiable risk, such as a mortgage. Term insurance is often used for this purpose. Term life insurance provides protection at a fixed price for a limited period of time (E.g., 10 years, 20 years, etc…).
A few facts about Term Life Insurance:
- Once the term is up, you can renew for a new term (please note that the cost of the insurance premiums will increase at the time of renewal)
- Many policies enable you, up to a certain age, to convert your term policy into a permanent life or universal life policy
- Term life insurance is generally the least expensive form of insurance (depending on age and length of term)
- Term life insurance does not have cash value
Whether you are starting out or established, here are some things that you should keep in mind as you consider buying life insurance:
- Start young. Because your premium is a function of your age, among other things, you should buy insurance as soon as you can afford it to lock in the lowest possible premium
- Buy only what you need. An advisor can help you perform a needs assessment, which will help you understand which types of insurance would be right for you
- Plan ahead. Making the right decision could save you a lot of money
