Term Life Insurance for Estate Planning
What is term life insurance?
"Term life" provides coverage for a specific period of time, or "term”, often between 10 and 30 years or to a specific age. It’s the most affordable and straightforward option to financially protect your loved ones. You make the same payment every month, and if you pass away within that term, your beneficiaries will be able to file a claim to receive the death benefit payout. At the end of your term, your coverage will end, and so will your payments.
how much term life insurance do i need…
Your policy should offer coverage at least 10-15 times your income and enough to cover your largest debt. You should also factor in future expenses, like childcare.
How long should my term insurance last…
Your term should be at least as long as your longest debt, such as a mortgage, and last as long as you anticipate having adult or minor dependents.
what happens if you outlive term insurance…
If you outlive your term policy, you can either let it expire, buy a new policy, renew at a higher premium, or convert it into a whole life policy.
How Does Term Life Insurance Work?
A term life insurance policy is a contract — you agree to pay a specific amount every month over a certain period, and the insurance company agrees to pay a guaranteed death benefit to your beneficiaries if you die during that period.
Once that period expires, you no longer pay the monthly premium, and the insurance company is no longer responsible for paying the death benefit. There is no monetary or cash value to a term life insurance policy.
The cost of the premium for your term life insurance depends on a range of factors, including your life expectancy, health and lifestyle. Basically, the life insurance company needs to decide how much of a risk you are to insure.
As part of the application process for term life insurance, you may be required to undergo a health exam. You'll also have to answer questions concerning your activities and work life since some hobbies, like scuba diving, and some jobs, like mining, are riskier than others.
What Is the Difference Between Whole Life and Term Life Insurance?
In discussing term vs. whole life insurance, it's essential to remember that term life insurance only lasts for a specific period and has no cash value.
Whole life insurance, on the other hand, lasts your entire lifetime — as long as you pay your premiums. It also has a cash value that you can withdraw or borrow against.
Term life insurance is usually less expensive than a permanent life insurance policy like whole life.
What Is the Best Term Life Insurance?
The best term life insurance policy covers your time of greatest need and pays out enough to handle your financial obligations. You'll want an insurer with excellent customer service and solid financial ratings.
Many people value convertibility when choosing a term life insurance policy. They want the option to switch the policy over to whole life insurance if the need arises.
Overall, the best time to buy term life insurance is when you're young and healthy — that's when your premiums will be the lowest.
Trust Your Term Life Insurance Needs to Estate Planning Inc
Estate Planning Inc has years of experience helping clients find the right insurance for their estate planning needs. We can help you identify the term life insurance coverage that will leave your family feeling safe and secure. Contact us today to learn more.