Coming to Terms with Term Life Insurance: The Length of your Policy

While obtaining Term Life Insurance policies online can let you apply for coverage quickly and upon approval can give you an active policy in minutes (especially if you are using www.nonmedlifeinsurance.com), taking the time to choose the appropriate length of your policy is essential to sign up with coverage you can live with.  Let’s take a moment to understand the many factors that go into choosing the best term for your Term Life Insurance.

Understanding Term Life Insurance in a Nutshell

Essentially, Term Life Insurance provides a cash payout in the event of your death during a certain period of time.  Whereas Whole Life Insurance policies provide coverage from the after your application is approved and you purchase the policy until the moment of your death, Term Life Insurance has you choose a length of time for the coverage to be effective.  Common terms of 30 years, 20 years, 10 years, and even as short as 2 years mean that during the length of the term, if you pay your monthly premiums, your beneficiaries will be paid if you die. 

Why Not Just Buy Whole Life Insurance?

The main reason people purchase Term Life instead of Whole Life Insurance usually comes down to cost.  The monthly premiums for Whole Life Insurance (also known as permanent life insurance) are significantly higher than premiums for Term.  It is not uncommon for monthly premiums for Whole Life Insurance to cost 10 times that of Term Life.  

Whole Life Insurance has other benefits such as doubling as a cash vehicle that allows withdrawal under certain policies of accrued cash in the policy before the time of death.  In this way, Whole Life Insurance is considerably more complex and can be structured, from a financial gains aspect, in many ways. Term Life Insurance is just that. Insurance for the defined term of the policy that pays out in the event of your death.  

What Factors Should I Consider When Choosing a Term Length

The key things to think about when choosing the length of your term are Age, Health, and Budget.  Let’s break these down.

Age – The older you are, the greater the risk to your continued health and therefore the more expensive your premiums will be.  If you are 20 years old and purchase a 20 year term policy, you will be 40 at the time that policy expires. If you pass away in that time period, your beneficiaries will receive the full payout.  However, if you are (most likely) still alive at the end of your term, then the policy expires. While you would have been covered during the course of the entire term, outliving the term leaves you at a crossroads where you will most likely need to buy more insurance, update your policy, or start from the beginning.  The down side to this is that when you are 40 years old, the premiums that you paid through your 20’s and 30’s will be higher.  

Health – This is less predictable, however it is still advisable to consider your health when thinking about the length of your term.  There are some cases where medical conditions that you suffer from will make it difficult to obtain life insurance in the first place.  That said, if you are in generally good health then choosing the term based on age and budget is your best bet.

Budget – In this sense, budget refers not only to the amount of monthly premiums you can afford to pay but also the amount of coverage your loved ones and beneficiaries will need if you should suddenly pass away.  Consider your children’s college tuition, the mortgage on your home, the debts you will leave behind, and the style of living that your family is accustomed to. By planning your family’s future needs should you not be around, you will be able to determine the amount of coverage that is right for you.  Then, you can choose the term based on your living budget and how much you want to pay in monthly premiums.

I Can’t Decide but I Still Want To Apply for Coverage

Life and death are unpredictable.  You want to have life insurance no matter what age you are.  If you just want to apply for coverage quickly so that your family is not financially exposed should pass away, a 2 year term might be just what you need to get the process rolling now, while you take time to decide your future needs. 

It is worth considering that the younger you are, the lower your premiums will be and that these premiums are locked in for the duration of your policy term.  This means that if you are 30 years old, getting a 20 year term that expires when you are 50 years old might not be advantageous since obtaining a new policy at 50 years old will be considerably more expensive.  Obtaining insurance for 2 or 10 years can guarantee that you are covered for a tragedy while still leaving you young enough to obtain a new and longer term for a more reasonable price when your current policy expires.

Apply for Coverage, Stay Covered

Obtaining Term Life Insurance through nomedlifeins.com is simple.  There is no need to submit yourself to a medical exam and you can choose your policy, term limit, and coverage in minutes.  Once your application is approved, you will be insured quickly and it will be one less thing on your plate to worry about. Whether it’s 2 years or 30 years, be sure to pay your premiums and keep your coverage active.  

We are happy to help you decide the best term for you.  Feel free to contact us with any questions and we will help you through the process. Stay safe, apply for coverage.