Life is unpredictable. There are many things in life that we don’t have control over. But we do control how to secure our and our loved ones’ future. Getting an insurance might be daunting at first, especially if you don’t know what works best for your needs. But identifying what is the best fit for you and your future is paramount. So if you’re still starting to get an idea of how to secure your future, term life insurance may be the best for you.
What is Term Life Insurance?
Often confused with whole of life insurance policies, term life is actually the more practical choice, especially if you consider your needs and financial capabilities. Term life insurance simply works like a permanent life insurance, except it has a certain “term” or expiration date, to put simply. If an insured person passes away within the benefit period, the payout goes directly to his or her beneficiaries.
How Does It Work?
Like any other insurance, an individual pays premiums on a regular basis within an identified period that usually ranges from five to 30 years. They can add beneficiaries who can receive the death benefit. But the main gist is that there is a term for when the insurance is valid. The premiums can also be paid in varying degrees.
Benefits:
Affordability
Unlike permanent or whole of life insurance policies, term life is comparatively affordable. The premiums you pay are also lower because of the limited coverage period. But, it still gives you the same benefits as a permanent life insurance.
Flexibility
You can usually choose how long of a coverage you need. If you are in a tight budget with other expenses, you can opt for a premium pay that works best and can easily be incorporated into your expenses. It is also very flexible and customizable depending on your needs at the time.
Temporary Financial Protection
If you are still young but financially forward and wants to secure your future, this kind of policy works best for you. Because it doesn’t need cost a lot for the premiums, it can be a great temporary financial protection until you can afford to spend more on a permanent life insurance.
Simplicity
Insurance talks even with a financial adviser can be daunting, especially when they start to talk about terms that you don’t fully understand. Fortunately, term policies are very easy to digest and comprehend. It just focuses on the coverage period you want, how much the premiums are and the frequency of payout, and the beneficiaries you want to include. It is by far, the simplest policy to understand.
Is Term Life Insurance Right for You?
Your Budget
If you have a limited budget, but you still want to secure your loved ones in case of an unfortunate event happening to you, you can opt out for a term policy. The premiums are lower, and if you are young, it’s a great option to consider that won’t make a very big dent on your savings or budget.
Coverage Duration
Again, when you are on the younger side, a coverage of 10, 20, or 30 years would be great for you. You still have a lot of time to prepare and pay for a more permanent option later in life, but you need to secure the now, as soon as possible. You never know what could happen in the near future, so having something to rely on for your family’s time of need is a good choice. If you value safety for the time being, and you are still in your prime, this type of policy would work for you.
Life Stage and Responsibilities
Getting an insurance is an obligation nowadays, especially if you have a young family or starting your family soon. It is always best to think of the future and get a policy that could keep you insured until your children are more secure in their lives. Considering the budget of a budding family, the term policy might be your best option.
Future Financial Goals
If insurance is not your first priority at the moment, it would still be nice to have something for your loved ones in case of an accident. So the term insurance would fit in nicely in your future financial goals given its low premium cost and staggard payments over long periods of time. It is a personal investment you should consider.
Convertibility and Flexibility of Term Life Insurance policies
The best part about getting term policies are its convenience. You won’t need to spend countless hours preparing documents for underwriting because some policies don’t need additional medical underwriting. You can also extend your initial coverage if you feel like you need it anytime. This makes it the most flexible option for any change that might occur in the near future.
Getting your own insurance policy can be a whole headache, but with the right information and the right people to guide you, your future will be secured. Term life insurance is best for people who have a limited budget but wants all the benefits an insurance gets. It is the best option if you’re looking for a temporary financial protection that is flexible, customizable, convenient, and easy to understand. However, it is still best to consult a financial adviser who can point you to the right direction. You have all the resources, so secure your and your family’s future today!