Why Get Life Insurance

Should You Buy Term Life Insurance?

This article discusses some of the differences between term life insurance and permanent life insurance. Consider these things when deciding which one to buy to ensure you get enough coverage.

Term Life Insurance

For many, life insurance can feel like just another expense - until you really need it. But even if you have a budget that doesn't budge, term life insurance can be a cost-effective solution to get the insurance coverage you need now at an affordable price.

Term Life Insurance Quotes - A Good Place to Start

Begin by asking yourself whether your family would have enough to live on, pay off debts (including a mortgage and funeral expenses), and pay for costs to raise and educate your children if you were gone. Remember that when you die, your paycheck stops, leaving a significant difference between your expenses and assets. Fortunately, this is where term life insurance can help fill the gap.

Try using an online life insurance calculator to get an estimate of the amount of term insurance you might need, or consult with a qualified life insurance agent for help. Considering buying the longest term you can afford to ensure that you have coverage for as long as you might need it. Also, consider adding policy riders that will allow you to access the policy death benefit in the event of a terminal illness or even convert a portion of your term policy into a permanent policy (such as whole life or universal life).*

What is the difference between term and permanent life insurance

Both term and permanent policies allow you to select an amount of coverage in exchange for your premium payments over the life of the policy, providing a lump sum payment to your beneficiaries when you die. Permanent policies earn cash value and remain in force as long as required premiums are paid on time. Coverage with a term policy lasts only for a specific time period (often offered at 10-, 20-, or 30-year terms), with no cash value accruing. Once the term is over, the policy coverage (and required premiums) will end. 

Term Life can be a very affordable interim solution

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. However, term life can be an affordable way to get the coverage you need - today.

Things to consider

  • Permanent life premiums are typically higher than term life premiums, making term a more affordable option to get a policy in place. But remember, term life comes with an expiration date!
  • Due to the cost, people who find a permanent policy more appealing might buy less coverage than they need, leaving them under-insured. Consider a combination of a permanent and term life policy to get the coverage you need, or a term policy rider that allows you to convert a portion of your term policy into a permanent policy at a later date.*

Getting the coverage you need … today

As you age, it gets more expensive to buy life insurance. Moreover, certain health conditions can make premiums increase - or worse, make it difficult to qualify for life insurance coverage at all. For the same price of a weekly specialty coffee drink, you'd be surprised at how much term coverage you could afford.

*Not all term policies or life insurance companies offer terminal illness or conversion riders.

For more information on types of life insurance, visit our learning center.

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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.

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