Home > Education & Videos > Match Your Situation > New To Life Insurance

Get Answers to Your Questions Before Buying a Term Life Insurance Policy

Life insurance is a long-term commitment. Before getting a life insurance quote or deciding to buy a term life insurance policy, ask yourself these very important questions:

  • How much insurance do I need? If I were to die, what would my spouse and dependents need in order to live comfortably?
  • What am I trying to accomplish with life insurance? Am I accumulating funds for education costs? Providing a way to pay estate taxes? Do I need supplemental income for my retirement or emergencies?
  • How much can I afford to pay for a policy?
  • After answering these questions and consulting with a life insurance agent, your next step is to choose which type of insurance best meets your needs.

Term Life Insurance

You should consider Term Life Insurance if:

  • You need life insurance for a specific period of time
  • You need a large amount of life insurance, but have a limited budget

Term life insurance enables you to match the length of the policy term to the length of the need. For example, if you have young children and want to ensure that there will be funds to pay for their college education, you might buy 20-year term life insurance.

In general, term life insurance pays only if you die during the term of the policy, so the rate is lower than for permanent forms of life insurance. If you are still alive at the end of the term, coverage stops unless the policy is renewed. Unlike permanent insurance, you will not build equity in the form of cash value. If you think your financial needs may change, you may also want to look into "convertible" term policies. These allow you to convert to permanent insurance without a medical examination in exchange for higher premiums.

Keep in mind that premiums are lowest when you are young and increase upon renewal as you age. Some term insurance policies can be renewed when the policy ends, but the premium will generally increase. Some policies require a medical examination at renewal to qualify for the lowest rates.

Term Life Insurance Advantages

  • Offers temporary life insurance protection at an affordable price
  • May be converted to permanent policy
  • Income-tax-free death benefits

 

Start your application online now or call one of our licensed agents at 1-800-771-5144.