Affordable Life Insurance Protection for Your Family

When To Choose Term or Permanent Life Insurance?

Selecting The Right Type of Life Insurance

An important decision in buying life insurance is knowing whether you should choose term life or permanent life insurance to provide the financial protection you and your loved ones need and deserve.

Young and Married with Children

Young families may need the most death benefit from a life policy because the need for income replacement that can cover the expenses for growing children is greater than if you had no kids.

Also, if a spouse who stays home to take care of the young children were to pass away, it would be an additional expense for the surviving spouse to pay for child care services to look after the kids.

A term life insurance plan is usually the least expensive option (by far) to get the most financial protection. Longer term insurance policies like the 20-year, 25-year or 30-year plans can be the most suitable for younger families.

Young and Married without Children

If both you and your spouse work and household expenses are shared equally, you may not need life insurance, depending on your incomes.

But depending on your lifestyle, it may be hard to maintain the same standard of living if one of you were no longer alive to help provide financial support for the family.

Since term life policies allow you to get just the basic amount of coverage you need, usually starting at a minimum amount of around $50,000 or more of insurance, you can pick a plan with a lower death benefit to get a more affordable price on your life insurance policy.

Single-Parents

Similar to young couples with kids single-parents who have younger children may also need a life insurance policy that provides a large death benefit.

Studies show that most single-parents are women, and the average salary single-mothers earned as of 2019 was around $48,000. This is much less than the average wage for married couples with children under 18, which is about $102,00 (as of 2019).

With less income among the majority of single parents, it’s more likely that there wouldn’t be enough savings that could be used as income replacement if the parent passes away unexpectedly.

In this particular situation it’s important to get a low-cost life insurance policy that can provide the most protection available. The lower cost of a term life insurance policy can make it a good choice for single parents with little or no savings.

Empty-Nesters

If your children are at college, that doesn’t mean your life insurance needs have come to an end.

You may need to support your children through the college years to help pay for expenses which may include tuition, room and board, books, or even clothing and a vehicle to get to and from college.

If your household runs on the income from two parents, you still may have some large debts to pay off like a mortgage on your home, an auto loan, which means you would likely need protection of income replacement, should one or both of you die.

Depending on your age, you may also have a while to go before you have enough money saved to retire.

At this stage in your life, a life insurance policy that has a death benefit your spouse could use to cover expenses if one of you dies may be the right option to consider.

A life insurance policy can build some cash value to supplement your income.

Also, you could choose a term life policy that converts to permanent insurance, or just choose a permanent policy depending on your specific life insurance needs.

For example, if you’re 50 and looking to have cash value in a policy by the time you’re 60, then a permanent plan may be best because it could take that long for the policy to build up some cash value over time.

If you don’t really need supplemental income, you could get a 10 or 15-year convertible term life plan.

So by the time you’re 60, you could have a whole life policy, and when you reach 70, you could have cash value in the policy.

One thing to keep in mind when converting a term insurance policy to permanent life insurance is that insurance companies usually only allow you to do this before you turn age 65.

Also, there are guaranteed issue permanent life insurance policies available for people ages 45 to 85 which can come in handy if you have serious health problems. Many empty-nesters, and seniors use these plans to cover their burial and funeral expenses.

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