Who Should Consider Term Life Insurance? Term life insurance isn’t right for everyone. However, in the right circumstances, it can be a useful tool. “Maybe you’ve got a mortgage that you’re trying to make sure is covered in the event of your untimely death. Or maybe it comes down to cash flow and the death benefit,” says Jolly. “If you can’t afford the premium on permanent life insurance, then I think term insurance solves the problem.”
The fact that term life insurance is temporary isn’t necessarily a bad thing. For example, if you don’t have kids, term life insurance could provide coverage while you pay off debt that’s cosigned with a parent. On the other hand, young folks who are starting a family might be worried about potential future health issues keeping them from qualifying for permanent life insurance or making it an unaffordable expense. In this case, a whole or universal life policy might be a better option.
Term life insurance also might not make as much sense for middle-aged folks who can afford a permanent life policy and have dependents who would be financially burdened if they were to pass away. In that case, it might be harder to get affordable permanent policies 20 years later when the term policy expires.
How Do I Buy Term Life Insurance?
The process of buying term life insurance varies depending on what company or broker you use. In general, you’d start by shopping around for a term insurance policy that fits your needs. Once you’ve narrowed it down to the policy you want, you’d contact the company or insurance agent or broker to start the application process.
You’ll need to provide basic information, like your name, address, marital status, gender, and age, as well as pertinent medical history, including existing health conditions. A medical exam may be required as well. Once approved, you can sign your policy documents and start making premium payments.
