“Should I buy term or permanent life insurance?” That’s usually the first question most agents are asked when they meet with a new client. While permanent life insurance is often a better long-term value, there are times when term life insurance makes perfect sense. Let’s examine each of these circumstances more closely.
If you are just starting out
Term life policies offer young families and people on a budget an economical way to protect their lifestyle. That’s because these policies provide simple, dependable coverage for a limited period of time, and are therefore less expensive than policies that provide lifetime coverage and other benefits.
If you are underinsured
As indicated above, the premiums on term life insurance policies are generally affordable. Therefore, you may find it easier than you thought to purchase supplemental coverage and increase the amount of protection you and your family enjoy.
If you have a short-term need
In many cases, people purchase term life insurance policies to give themselves extra financial protection during critical - or particularly vulnerable - periods in their lives. Some common examples include purchasing a new home, starting a business, sending a child to college, or having a spouse leave a job to care for an aging relative.
If your needs may change
One of the best things about term life policies is the fact that you can typically convert them to permanent life insurance if your needs change down the line. And because the ability to convert is often guaranteed - even if your health changes - this feature essentially preserves your future insurability.
Deciding on the right type of life insurance isn’t easy. It is, however, vitally important - especially for young families who may not have had enough time to build up a financial safety net on their own. In many cases, term life insurance can be a viable option; however, you may find it well worth your while to consult an insurance agent and make sure you have considered all your options.