Life is always changing – which is why it’s important to review your insurance needs and make sure your coverage is keeping up with your life. Whether you’re entering adulthood or nearing retirement, you may have a need for life insurance… but understanding which policy is best for you can be confusing. Let’s talk term and whole life insurance to help you find which benefits you the most, at any stage of life.
TERM LIFE INSURANCE
Term life insurance provides coverage for a specific number of years and you select the “term”. It’s an easy, more affordable option if you’re not looking for lifelong coverage. But, if you should change your mind, during your policy term you usually have the option to renew it or perhaps convert it into a permanent life plan.
At Erie Insurance, we offer two term life insurance plans including an easy-to-purchase option and level term insurance. A Bowers Insurance agent can help you decide which option is best for your situation.
Some general things to know about term life insurance:
- You have the option of choosing how long and how much
- Plans usually come in 5, 10, 15, 20 or 30 year packages
- It is often more affordable than other life insurance options
- Some policies come with an option to convert to permanent
- It only pays if you perish during the period of the policy
When would I need term life insurance?
In your 20s: There are reasons to consider life insurance protection at a young age. Your rates will be less expensive because insurers price policies based on risk and young people have a far lower mortality rate than older groups. College and credit card debt could be one expense you want to cover. According to Debt.org, the average student debt is over $37,000. A term policy can help relieve the burden of college loan payments away from your co-signer or family.
In your 30s and 40s: A new house, spouse and growing family are just a few reasons to consider a term life policy. While the best approach is often a blend of term and whole life insurance - that provides lifelong coverage and builds cash value – term policies can help cover the basic expenses if the unexpected does occur.
Whether you’re a fresh-out-of-college grad, a home owner, newly married or just had your first child, here are a few reasons why you might need a term life policy:
- Funeral costs - From funeral planning to cemetery arrangements and proper permits, a funeral can cost up to $8,755. A term life insurance plan helps cover those costs so your family and loved ones don’t have to.
- Income protection - Consider how much money your family would need without your paycheck in the picture. A term policy can help cover rent, utilities, groceries, car payments or childcare expenses so your family can maintain their lifestyle to the comfort they are used to.
- Mortgage protection – Having life insurance in place can allow your family’s story to continue in the home they know and love.
- Child starter plan - Purchasing life insurance when your children are young means they’ll be able to have life insurance when they need it most – even if there are health problems that run in your family. Once in place, their rate won’t go up and they’ll also have the option to exchange their term policy into a permanent cash value policy later in life.
by Lauren Sovisky