Term Life Insurance
There are many important financial decisions in life, but life insurance is one of the most critical. Any person with a family who depends on them needs to have sufficient life insurance coverage in place. The purpose of life insurance is of course to protect the individual’s family in the event of an untimely death. Having sufficient life insurance coverage in place is absolutely essential – without it family members will suffer not only a devastating emotional loss but serious financial hardship as well.
Determining how much life insurance is needed can be quite a challenge, however, as can paying for that insurance coverage. Financial experts recommend that workers have a death benefit that provides between 20 and 25 times his or her annual salary. This amount is generally considered sufficient to provide the survivors with the income they will need in the absence of the main breadwinner.
Of course providing that amount of life insurance coverage can be costly, and it is important for workers to explore their options carefully. The calculation outlined above means that a worker with a $40,000 salary would need to have life insurance coverage with a death benefit between $800,000 and a million dollars. Many people feel that this amount of coverage is out of reach, but with the right planning it is possible to get the needed coverage at an affordable price.
For many workers the answer is as simple as a quality term life insurance policy. Term life insurance is the simplest type of life insurance on the market, and generally the least costly as well. That is because term life insurance provides a death benefit – and only a death benefit. There is no investment aspect and no cash value. The purpose of the life insurance policy is simply to provide a death benefit to the individual’s beneficiaries so that they can go on with the rest of their lives.
As the name implies, term life insurance provides coverage for a set period of time – known in insurance parlance as the term. This term can vary widely – from as little as five years to as long as 30 years. The premium will generally be set for the life of the term, making it easy for workers to budget for the coverage they need.
After the original term has expired the insured is free to purchase coverage for a new term, with a new premium. Workers can use this type of coverage to provide their families with the coverage they need throughout their lives, providing a level of flexibility. For instance, a worker with young children may need more coverage than that same worker after the kids have grown up and gone out on their own. By adjusting coverage as needed savvy shoppers can make term life insurance even more of a bargain.
Term life insurance can be an excellent way to provide peace of mind, financial security and reassurance to all members of the family. Purchasing term life insurance is an easy and very affordable way for workers to provide for their loved ones no matter what the future may bring.