Why term life insurance is a smart choice for families
Affordability and flexible coverage add up to peace of mind for families of all sizes.
Though it may not be a common topic around the dinner table, ensuring you have adequate life insurance in place is a must. It’s a powerful way to help protect your family’s future while also giving yourself peace of mind today. And families have plenty of options when it comes to life insurance.
Though permanent and universal life insurance can be wonderful options, term life insurance tends to be a wise choice for families. It offers plenty of flexibility along with more affordable premiums, which are both important for families of all types and sizes.
A look at term life insurance
All life insurance policies, no matter which kind you choose, share a few things in common. First, a life policy will include adeath benefit, which is the amount paid to someone of your choosing if something happens to you. That person is calledyour beneficiary, and they’ll receive the death benefit amount that is generally not considered taxable income. In addition, you’ll make payments when you buy a life insurance policy, which are called premiums.
However, term life insurance has some key differences when compared to permanent or whole life insurance. Those differences can be incredibly beneficial, especially for families.
You pick your coverage level
When you choose your term policy, you get to set the death benefit amount (the coverage amount). Insurance companies will often have a minimum and maximum amount of coverage available. For instance, Legal & General America offers plenty of flexible options when it comes to term life insurance for families becauseour coverage levels start at $100,000 and go all the way up to $10 million.
But it’s important for you to think through a few factors before choosing an amount. You’ll want to start by taking a look at your goals for your family. For example, if you’d like your kids to go to college, it’s a good idea to factor in the cost of a degree for each child when choosing your coverage limit.
Do you have any debt or a mortgage that isn’t quite paid off yet? Buying enough coverage to pay off your mortgage or car loan if you pass away will provide security and stability for your family in the future. And many families decide to buy enough coverage to replace an annual income for a set number of years — say, 5-10.
Don’t forget about stay at home parents, who may not bring in income, but contribute enormously to the household. If you’re the primary income earner and your stay-at-home spouse were to pass away, you’d suddenly need to locate and pay for childcare and other unexpected household expenses.
It’s not always easy to determine how much coverage you should have. A good place to start is with this life insurance calculator that will help you think through these and other considerations.
You choose your policy length
Another key thing to remember about term insurance is that you get to pick how long you’d like your coverage to last. Term policies are temporary and you buy them for a certain number of years.
Many companies offer 10 year policies, including LGA. LGA also offers coverage lengths all the way up through 40 year policies, providing even more options for families.
Term policies are more affordable
Because you choose your coverage amount and policy length, term life policies offer plenty of flexibility. But there’s another big advantage: affordability.
Term insurance isn’t designed to last forever, just for a set time. That means premiums for term policies will be much more affordable. And you can design your policy around your budget, which is perfect for growing families. The premiums will also stay the same, so you can budget for your life insurance policy with no surprises.
Though your premium will vary, term life policies can be as low as $8 per month.
Term riders offer more coverage options
When you first buy your term policy, you’ll be able to add extra coverage through term riders. These are optional, but they can make a lot of sense for families.
A Children’s Term Rider will add term coverage for multiple kids for one fee, even if you have more children in the future. It offers term life coverage for your kids if the worst should happen, regardless of their health. Plus, your child can choose to convert this temporary coverage to a permanent policy later on if they choose. This can be invaluable if a health condition develops that may prevent them from being able to find affordable life insurance down the road.
When should families buy term life insurance?
The best time for families to buy term life insurance is today. Because policy premiums are based on health and age, the most affordable time to buy a policy is typically right now. Even so, don’t delay buying coverage if you’re concerned about age or health. You can always get a free quote based on your personal details and coverage needs — it just may be more affordable than you think.
Protection and peace of mind are possible
Clearly, term life insurance offers plenty of flexibility for families of all sizes. Buying coverage now can help you lock in lower rates for the length of your policy, whether you choose 10 years, 40 years, or something in between. For a personalized quote, please contact one of our advisors.
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