Reasons to Buy Term Life Insurace
We all have different needs and wants in our lives, but one thing that most of us need is some kind of life insurance policy. We all want to believe we are invincible and nothing will ever happen to us. And I hope nothing bad ever does, but according to Guinness World Records, (this is straight from their site) the greatest fully authenticated age to which any human has ever lived is 122 years 164 days by Jeanne Louise Calment (France). Born on 21 February 1875 to Nicolas (1837 – 1931) and Marguerite (neé Gilles 1838 – 1924), Jeanne died at a nursing home in Arles, southern France on 4 August 1997. This just illustrates that we are not invincible and we only get to enjoy this lifetime for a comparatively short period of time so we might in addition be prepared.
There are generally 3 types of life insurance: Term, Whole Life and Universal. Im going to talk a little about term today. Its what my wife and I personally have (in addition as some whole life) and its what I believe the most in. Why buy life insurance? Heres the short answer highlighting some of the main reasons of why you should consider buying life insurance:
Pay the mortgage for your spouse Replace your income so your spouse can pay the monthly bills Pay any debt you may have so your spouse doesnt have to worry about it Pay for funeral costs Finance future needs such as a childs education or spouses retirement Continue a family business
Term Life Insurance
Today Im going to go over term life insurance. It is what it sounds like. It is designed to last a specific period of time. At the end of that time, or when the term is up, the policy is finished. Typically at the end of the term the policy is expired and you pay no more premiums and you do not get any money back. There are variations of a term policy that allows you to get money back and revive it etc., but Im only going to talk about a straight term. The different variations should be discussed with your agent to see what fits your needs. Term policies can be 5, 10, 15, 20, 25, or 30 years long. You get to choose the period of time you want the policy in force based on your personal situation.
Term policies are also the most affordable policies mainly because they expire at the end of the term and you get nothing back when it expires. I know that doesnt make it sound like a smart choice, but it can be. For example:
Say you are 30 years old, are married, have a house with 20 years left on the mortgage and a 5 year old child. One option would be to get a 20 year term policy to last as long as the mortgage and long enough to get your child by college. After that you might not have a need for as much life insurance. Lets say your mortgage is $100,000 and you want your spouse to be able to pay off the mortgage and have $20,000 a year to raise your child if something were to happen to you. $20,000 a year for 20 years plus $100,000 mortgage totals $500,000. Thats a lot of money, but that is a realistic number that your spouse would need if you didnt make it home the next day.
A lot of people see that $500,000 and think there is no way they can provide that kind of insurance policy. You can. A healthy 30 year old non-smoking male or female should be able get a policy like this for less than $25 a month. I am willing to use $25 a month for myself and $25 a month for my wife to make sure that we are financially taken care of is something happens to one of us. I probably use more than $50 a month between food spoiling that I dont cook in time or snacks at the gas stop. If I can provide to do that then you better believe I will find $50 to make sure my family will be taken care of. If you are wanting to get a policy that gives you money back when it expires you will have to pay a little more, but you at the end of the term you will get back all your premiums that you paid. Thats why term policies are so attractive. A lot of coverage for a low premium.
Many people nevertheless dont have life insurance to take care of their families. There are a variety of reasons for this. Below Ive listed 3 of the most shared excuses people give me when I talk to them. Remember, life insurance is one of many tools designed to help your family prevent a financial catastrophe.
1. I cant provide it.
I already showed you it can be affordable. You dont already need to get the exact amount you need. Just by having some insurance to make it a little easier for your family is better than nothing at all.
2. I dont need it
Do you have a spouse and/or child? Do you think you may someday pass away? Then you should at the minimum talk to an agent about options out there. already if youre single, someone will have to pay your funeral expenses if you pass away so you might want to look into getting some insurance in addition.
3. I dont have time to meet with an agent.
Really? You dont have a half hour? How long is Chicago Fire or at all event your favorite show is? An agent will go to you and is willing to work evenings and weekends. Most of us can find a little time. Now there are already term policies that can be issued within 24 hours and dont require a medical exam. The policies with no medical exams will save you all kinds of time.
Now, lets go back to being invincible. Were not. None of us are. We probably all have been to a assistance for a family that had a premature death that produced not only an emotional hardship, but a financial one in addition. Thats why there was a assistance in the first place, because the family didnt have life insurance.
The bottom line, talk to an agent about life insurance. Just start the conversation. Find an agent you trust that has access to all the different options so you get what you need.
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