Most people associate Term Life Insurance with its primary purpose: to protect loved ones in the event of an unexpected death. But term life can be so much more! Discover how it can play an important role in a solid financial plan.
Many financial plans focus on retirement investments that mature when you're no longer earning money. The income kicks in when the Golden Years begin.
But what happens if you die during the income producing years? Future income represents only part of the story in a financial plan. A carefully thought out plan often protects today's income and assets.
Term Life Insurance can be extremely useful in this regard. Here are some ways it can support your financial plan.
Perhaps the most common reason people choose term life insurance is for income protection. This is especially true for families, who might face a financial hardship if one ─ or both ─ parents died and the income stopped or was severely impacted. Because families often need to watch their budgets, choosing an affordable means of income protection is important. Term life insurance can offer significant protection for a relatively low cost.
The dream of home ownership can quickly become a nightmare if there's not enough money to pay the mortgage. Whether you're looking to buy a home or you have a home and hope to pay it off someday, term life insurance can offer an easy way to ensure there's enough money in the event of the insured's death. For example, if you owe $250,000 on your home and you take out a term life policy for that amount or higher, you can enjoy peace of mind knowing that if something should happen to you, there is money that could be allocated for the mortgage.
In addition to traditional term life insurance to help protect your mortgage, there is also a product called mortgage term life insurance (also known as decreasing term life insurance). This insurance is designed specifically to pay off a mortgage in the event of death. As you pay the mortgage down, the policy's value decreases to reflect the lower mortgage balance. When considering this type of mortgage protection, it's worthwhile to compare it to a standard term life insurance policy. Many people find that choosing a high enough coverage amount of term life can protect the mortgage and leave additional money for beneficiaries.
Many financial plans include provisions for funding college tuition. For example, some people choose various financial plans to save and pay for college tuition. But like some financial vehicles, in the event of a premature death, some financial vehicles could fall notably short of footing the college bill. With term life insurance, if you should die, your beneficiaries receive a tax free benefit. Purchasing enough coverage for them can mean covering the costs of college.
Term life insurance is not a savings vehicle, but it can help save your financial plan. It can protect important financial goals you have set forth in the event of your death, and provide the money your loved ones need to enjoy the future you envisioned.
To see how Term Life Insurance might help make your financial plan more solid, give our agents a call. They will ask you a few questions to help you determine what makes sense for your needs, budget and financial plan.