When should you buy term-life insurance?


Similar to most things that factor into estate planning, buying term life insurance is a highly personal decision.

That’s because, even though it can’t be considered an investment for financial gain, it is an investment in the future comfort and stability of your spouse, children and other dependents.

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Simply put, a term life insurance policy is designed to complete your financial responsibilities and provide a temporary source of income for any dependents should you die unexpectedly. While generally considerably more affordable than permanent life coverage, a term life insurance policy delivers the full face value of the insurance, not the cash value (as provided through a permanent policy).

If you’re currently between the ages of 40 – 60 and have children or other dependents – such as elderly parents – buying term life insurance can help cover expenses that include: mortgage, credit card debt, education, burial and a wide range of other expenses that would leave your family members with a costly burden.

The benefits of buying term life insurance at a young age

Some say that if you have no dependents, you don’t currently need life insurance. And that may be true for most. In many cases, buying term life insurance is generally unnecessary for those who:

* Have no dependents and don’t anticipate any within the foreseeable future

* Are currently retired and living off an acceptable level of retirement benefits, social security, investments or another source of income

However, buying term life insurance while you’re young can also provide a substantial benefit should you decide to have a family or have other dependents to care for. On the whole, term life insurance coverage can be somewhat less expensive when purchased at a young age. For example, if you and your spouse are newly married and both working, you can lock in an affordable rate that will provide a reliable safety net should you want to start a family in the future.

In addition, buying term life insurance can also serve as a means of estate planning – sometimes enabling your beneficiaries to avoid probate or income taxes. If you have a large or complex estate, you may want to meet with an attorney to determine the most appropriate means of incorporating a term life insurance policy into your estate.

It’s worth noting that children rarely need term life insurances (if ever). The one exception would be to replace any income necessary to the household should the child die.

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"Did you know that since 2005 the percentage of U.S. adults without life insurance has nearly doubled?"*