If you have anyone that depends on you, then you should definitely consider life insurance. Life insurance can be one of the best ways to protect your family from the financial catastrophe of losing you. When it comes to life insurance options, having the best term life insurance can help to do just that; protect your family's future.
Dealing with tragedy is emotionally difficult, and no one likes to imagine it. Although it can be uncomfortable to think about the need for life insurance, it can provide reassurance that your family is provided for in the worst-case scenario.
If the unimaginable happened, it is easy to see how they would likely feel overwhelmed by the idea of handling new financial responsibilities.
However, you can take steps to find the right life insurance policy now. In turn, you'll know that you’re helping your family to be financially protected no matter what happens to you.
Today we will explore what term life insurance is, how to determine the amount you need, and how to compare term life insurance rates, so you can fit it into your financial plans.
What is term life insurance?
Term life insurance is a type of policy for a set number of years. If you passed away within the set term, then your family would receive an agreed-upon payout amount. In most cases, you’ll have the opportunity to choose a life insurance term between 10 to 20 years.
For example, let’s say you take out a life insurance policy for $250,000 to cover a 20-year term. If you passed away before the 20-year term was up, then your family would receive the $250,000 payout.
Of course, the payout is contingent on the fact that you’ve kept up with your insurance premiums for the duration of your term.
How is term life insurance different from whole life insurance?
If you’ve been researching your life insurance options, then you’ve likely come across whole life insurance as another option. With whole life insurance, you are signing up for your entire life instead of a specified term.
With that, your family will receive a death benefit no matter when you pass away. That is, as long as the policy remains in force.
In addition to the death benefit, there is usually a cash value component associated with whole life insurance. The cash value component is interest paid to a policy.
As you pay your premiums, the insurance company adds these to a general account and invests to help ensure sufficient interest can be paid to a policy based on the terms of the contract.
Due to the extended nature of whole life insurance policies, the cash value component, and the associated commissions and expenses, this type of coverage is usually more expensive.
It's important to understand your options and evaluate what's best for your personal situation before committing to a policy. In many cases, you may be better off choosing a term life insurance policy and investing the difference between the two premiums.
For instance, by investing the difference in index funds, you are likely to get a better return on your investment than a whole life policy after you work out the fees.
You'll also have more flexibility over your investment portfolio. You will also enjoy the peace of mind of a payout for your family if you pass away prematurely.
Who can benefit from it?
If you have anyone that depends on your income at all, then life insurance is a good idea. Of course, the hope is that you’ll live a long and happy life in which the lump sum of your term policy is never paid out. But you likely want to protect the financial stability of your family in the event of your death.
A few people that might consider life insurance include a married couple with a new mortgage or a young mother with children that intend to go to college.
If you are currently paying for a major financial commitment such as a mortgage or a child’s education, then life insurance is something that can help protect those dreams even if you aren’t there.
The idea of life insurance can be scary to think about. After all, life insurance is preparing against the financial consequences of your death. It is important to look past the uncomfortable need for this insurance and take action to help safeguard your family's future.
How to calculate your term life insurance needs
Are you ready to move forward and find the best term life insurance policy for your family? Then the next step is to determine how much coverage you need. Adding up the financial needs of your family in the event of your passing can be tricky.
Luckily, you can take advantage of a term plan calculator. This free tool will ask for information about your current debts, your children, and your financial desires for their future. Use this calculator to get a very accurate estimate of the amount of coverage that you need.
Term plan calculators
It only takes a few minutes to run through a term plan calculator to determine what amount of coverage you need for your family. So, here are a few term plan calculators to get an estimate of insurance costs:
Haven Life Term Plan Calculator
Ethos Life Term Plan Calculator
What is the best term life insurance?
The best term life insurance depends on your specific needs. For instance, if you have dependents, debt, etc. So consider this when calculating how much coverage you will need as well.
There are many companies that offer a range of term life insurance policies. Here are a few of the most popular ones you can start with so you can compare term life insurance rates:
Ladder
With Ladder, you’ll be able to take advantage of term life insurance policies if you are between the age of 20 to 60. The company launched in 2017 and has taken a streamlined approach to term life insurance.
The application is easy to complete online and you’ll have many options to adjust your coverage once you’ve started your policy.
Haven Life
Haven Life Insurance Company is backed by Massachusetts Mutual Life Insurance Company which has over 160 years of experience. They offer some of the best term life insurance that is also affordable.
Another pro is they offer a policy called Haven Simple that doesn't require a medical exam to finalize coverage!
Everyday Life
Everyday Life Insurance prides itself on making your policy more affordable as you age. They offer terms for up to 40 years and up to $10 million in coverage. No wonder it's some of the best term life insurance available.
Ethos
Ethos is another company that offers fast and affordable term life insurance. They are backed by top-rated companies such as Trustage, Ameritas Life Insurance Corp., AAA Life, and Legal & General America.
The great news is they have a free non-binding application and offer a "30-day free look period with a money-back guarantee."
Fidelity Term Life Insurance
Fidelity is no stranger to the finance world. So of course, they also offer some of the best term life insurance for their clients. They provide a quick quote in seconds so you can get a rough estimate of how much your policy may cost.
You can start the process online, and they offer a 15-minute phone call for an expert to walk you through the entire process.
Be sure to compare term life insurance rates so you can get the best price possible for the policy you need.
Is term life insurance right for you?
If you don’t have any dependents or debt, then you likely don’t need life insurance at this time. However, if you have any dependents that rely on your income or if you have a mortgage or other debt, then term life insurance can be a smart financial move. The right life insurance policy can help protect your family financially even if you are no longer there for them.
Term life insurance is truly a way to bring more peace of mind to your life as you work to build a better life for your family. Take action today and compare term life insurance rates to find the right policy and guard your family financially.