Did you know that term life insurance can help protect your family in case of an unexpected loss? Term life insurance is a type of insurance that pays out a death benefit based on the policy’s face value, usually for a specified period of time. A term life policy begins when you first apply for coverage and ends upon your death. The amount paid varies depending on your age at the time of application, but it’s generally less than other types of policies such as whole or universal life insurance policies.
Term life insurance can be used to provide financial security in case something happens to you or your family members while they’re still alive. Like losing their jobs, getting married or divorced (or having kids), getting sick/injured, or even just being old.
Why Do You Need Term Life Insurance?
We all have our own reasons for wanting life insurance. Perhaps you want to ensure that your family has enough money to get by if something terrible happens to you. Maybe you’re trying to protect your savings and investments from the unexpected. Or maybe you want someone else to take care of those things for you when the time comes. Whatever your reason, term life insurance can help. Below are some of the reasons why you might need one:
Reason #1: You Want To Provide For Your Family.
You want to make sure that your family is provided for in case of an untimely death. If you have enough savings, that’s great! If not, term life insurance can help cover funeral costs and provide a source of income while your loved ones are grieving.
Reason #2: You have a mortgage or other debt.
Term life insurance is a good way to protect your family’s future by paying off the balance of the
or other fees on their inheritance at death. It also covers things like home loans. If something happens and leaves them unable to pay their mortgage or rent payments anymore. Like if they lose their job, they won’t lose ownership of their house too!
Reason #3: Your children depend on your income.
As a parent, you are responsible for providing food, shelter, and clothing for your children. You also provide education and medical services that enable them to lead productive lives.
The financial stability of your family depends on having enough income coming in from work as well as Social Security benefits paid out by the government every month or less frequently. If something were to happen at work or if an unexpected expense arose suddenly that resulted in the loss of income. This type of insurance would help fill those gaps until they could be covered by another source such as savings accounts or retirement plans
Reason #4: You want to protect your savings and investments.
You want to protect your savings and investments. If you die, your family may have to sell assets to pay off debt or debts that were incurred while you were alive. This could include selling a business or home. You also want to make sure that any profits from these sales are protected by a life insurance policy as well.
A term life insurance policy pays out a cash sum upon death that’s equal to the total amount paid into the policy over its duration (usually 10 – 20 years). It does not build up an annuity for future payments – instead, it pays out immediately upon death without interest charges or inflation adjustments built into its payout amount
Reason #5: You want to give your family choices.
The good news is that with term life insurance, you get to choose how much coverage and how long it lasts. You can also choose which type of policy works best for you: whole life or universal life. And if one type doesn’t suit your needs well enough, there are plenty more options available!
Whether it’s adding an extra year onto the original term length or choosing a different plan altogether like cash value. These types of policies give families flexibility when it comes time for planning their finances.
Reason #6: You want to establish an inheritance for heirs.
Term life insurance can be a great way to leave an inheritance. When you die, your heirs will receive a monthly income from the policy until they reach age 18 or older. This allows them to earn money without having to take on any financial responsibility and gives them valuable time to learn how much money they need in order to live comfortably.
Term life insurance can also provide steady financial support during college or career training, allowing students time off from work while going through their education process. Once they graduate and begin working full-time careers, this policy provides them with additional resources so that they can continue living comfortably until retirement age if needed (which normally occurs around age 70).
Reason #6: To reduce the income tax burden for your heirs.
In the event of your death, you want to make sure you don’t leave an income tax burden for your heirs. That’s why it’s important to have life insurance in place before they are born.
There is no estate tax on the first $5 million of property at death in most states. However, when this amount reaches $10 million or more, there is a federal estate tax which can be as high as 40%. This means that if you have $20 million in assets when you die and give half of them away ($10 million) before age 95 then they will owe nearly $1 million in taxes!
This could wipe out all their savings by age 65 just because they were too busy saving up money for retirement so that later down the road when they actually needed it instead spent it all paying off debts.
Reason #7: To cover burial and other final expenses.
- Burial: Life insurance can be used to help pay for the cost of a funeral, so you won’t have to worry about paying for it out of pocket.
- Other final expenses: If something happens that prevents someone from being able to care for themselves, they may need assistance with things like food and shelter until they can get back on their feet again. Life insurance can provide financial support during this time as well.
How Much Term Life Insurance Do I Need?
The primary factors that determine how much term life insurance you will need are:
- Your age. The younger you are, the less likely it is that your family will want to continue paying for a policy after your death. This is not to say that young people can’t buy term life insurance and set aside money for their families, but it does mean that they should plan for other sources of funding before investing in this type of coverage.
- How healthy you are today and in the future from health issues such as cancer or heart disease; diabetes; high blood pressure; obesity/diabetes (which makes it harder to get back into shape after being overweight); etcetera… If these conditions make getting around difficult or impossible without help from others (elderly parents), then having some extra money available might be helpful when buying long-term care services such as assisted living facilities or nursing homes where staff members provide assistance 24/7 throughout each day instead going through all their meals alone while trying not to fall down due
Choose Your Term Life Insurance Policy
To choose the best term life insurance policy for your needs, consider these factors:
- Your budget. If you’re looking for a low-cost way to protect yourself and your family in case of an unexpected tragedy, consider a policy that has a low monthly premium. You can also get discounts from certain companies if you have other policies with them already or join their loyalty programs (for example, American Express cardholders get $20 off their first year’s premium).
- Coverage options and how much coverage is right for you? For example, do you need coverage until age 100 or just until age 80? Or perhaps only until age 30 or 55 (if this applies to someone else in your family)? Specific details about what types of situations would trigger medical bills and how much those bills might cost are helpful when comparing different policies’ deductibles.
If you’re looking to buy term life insurance, we hope this article helps you to be informed about this type of insurance and how it works before making any decisions about the type of policy that will best suit your needs.