Term Life Insurance Is Meant To Be Temporary
Term life insurance provides temporary coverage. Yes, if a term policy is renewable you can continue the policy after the initial term BUT you will have a much higher premium based on your age. Also the term policy will renew annually every year after, so that means the price will continue to rise each year. Some clients are upset by this and if they have had their policy for 20 or 30 years the cost of any life insurance policy is going to be very high. Now they are wondering how they will afford life insurance going forward.
Here are some important items to consider regarding term life insurance policies:
1. Is term life insurance the right fit? Write out a list of the people and things you are responsible for. Are there young children, mortgage, debts, loans, college? What is your income and your spouse’s income? Is there only one income in the household? Ask yourself what would my family do if me or my spouse suddenly passed away tomorrow? How would either one make ends meet and continue their lives as they and their family know it?
2. How long of a term length is your term life insurance policy good for and how old will you be at the end of the term period, if you do not pass away? Let’s a say a person is 35 years old and they take out a 30 year term policy. In thirty years they will be 65. Automatically, just based on age, the cost of insurance will be much higher at age 65. Chances are at age 65 any children will be grown and if there was a home mortgage it could be paid off or is significantly lower than it was at age 35. So a person may not need a large term policy but if they do not have any other life insurance policies and their health has changed for the worse it could be very hard to be approved for a decent amount of life insurance.
3. Know your policy! Make sure you know exactly what type of life insurance policy you have and how long it is good for. Know where your policy is and what life insurance company issued it. Take your policy out and review it every now and then. Does your life insurance still meet your needs and goals? Remember, there is so much more to life insurance than just paying premiums every month.
In summary, I think it’s a great idea to look at where you are today in your life, as well as the goals you have set for yourself and family in the future. Will your term life insurance or any life insurance policy you have meet your needs if you suddenly pass away tomorrow? How old will you be at the end of the term period? Will the term policy take care of everything you need it to? Now’s the time to start thinking about these types of things because time is fleeting. Some clients tell me they feel that term life insurance is a waste of money. We all have different views and opinions and that’s okay. I just look at it this way - hopefully I do not pass away during the term period I have chosen but If I do I know there is X amount of dollars going to my loved ones to help them continue their lives and their lifestyle as they are accustomed to.
About the author: Dan Cody has been in the life insurance business for over 7 years. He loves playing a variety of instruments including the guitar, bass, drums, and piano. He also supports cancer research foundations and volunteers at local pet shelters. Dan enjoys helping customers understand life insurance, so they can find a solid policy that fits their needs. You can reach Dan at 1-800-651-1953 or DCody@Pivot.com.