Term life is very popular. If shopping for insurance, do you understand the features of term life or how it differs from other types of insurance? Read on for details.
People often delay purchasing life insurance
because they think it is more than their budget can handle, and they often overestimate how much it will cost. In fact, according to LIMRA's 2020 Insurance Barometer Report, over half of Millennials believe term life insurance is over six times more expensive than it is.1
Term life can be an affordable way to get the coverage that you need.
You may have heard term life insurance referred to as a temporary life insurance policy. This is because term life insurance policy provides coverage for a certain period of time, or a specified "term" of years. If you were to die during the time period specified in your policy (and the policy remains in force), then a death benefit will be paid out.
But what can term life insurance be used for?
Term life insurance can be used for many different purposes. Some common uses for term life may include:
- Replace your income if you were to die unexpectedly
- Help your family cover your final expenses and medical bills
- Leave your family with enough money to pay off debts such as a mortgage
- Ensure your children are left with money to help pay for college
- Provide required coverage for a minor child as per a divorce settlement
- Can be used by businesses for key person insurance or buy/sell agreements
For many, life insurance can feel like just another expense - until you really need it. But even if you have a budget that can't budge much, term life insurance can be a cost-effective solution to get the insurance coverage you need now at an affordable price.
1. LIMRA, Life Happens 2020 Insurance Barometer Report