If you have a spouse, children, or both, and your current and future standard of living depends on the money you bring home each month, then term life insurance is the best financial purchase you’ll ever make! For just a few cents a day you can guarantee that if something unexpected happens to you, they will not have their future insured.

The Purpose of Term Life Insurance

Nothing can be simpler than term life insurance. In exchange for a fixed premium, the insurance company agrees to pay your beneficiary (the person designated to receive the proceeds) the full amount of your policy.

This type of insurance policy does not build any cash value. You simply decide how long you want the coverage to last and pay the specified premium. The longer the duration of coverage, the higher the premium.

Here is an example of a $100,000 policy for a 35-year-old non-smoker:

A ten-year term policy is $7 per month, a twenty-year term policy is $9 per month, and a thirty-year term policy is $13 per month

Here is an example of a $100,000 policy for a 50-year-old non-smoker:

A ten-year policy is $14 per month, a twenty-year policy is $21 per month, and a thirty-year policy is $36 per month

How long do you need life insurance for?

Most people will need coverage for longer than they think. Consider these reasons to buy life insurance and the appropriate terms:

You have young children and you want to guarantee that in the event of your premature death (isn’t it all premature death?) they will be paid for college. In this case, the best would be a 25 or 30 year policy.

You have a mortgage on your home and currently require your income, as well as your spouse’s, to make ends meet. Since most mortgages are of the thirty year variety, I would look for a 30 year term policy.

You and your spouse are both 50 and empty nested, but both incomes are required to maintain your income standard, including saving for retirement. In this case, the ideal is a term policy of twenty or thirty years.

Buy the cheapest policy you can!

Regardless of the insurance company, a $100,000 twenty-year term policy will pay $100,000 in the event of death. Since it doesn’t build any cash value, it doesn’t matter which company you choose to buy from. The only caveat is that you only want to buy from an insurance company that is rated “A” or better by AM Best. These are the companies with the strongest financials. On my website you can buy the rates of the best life insurance companies in the United States.

Shopping is critical because rates will vary significantly from company to company. Rates on a $250,000 thirty-year term policy for a 40-year-old non-smoker without a physical exam can range from monthly premiums as low as $24 with the least expensive carrier to as high as $36 per month with the most expensive carrier . In all cases the death benefit is identical. My suggestion is to buy the least expensive plan!

If you’re healthy, switch plans and save money!

Term life insurance rates have been steadily declining for the last thirty years. Just because you bought a twenty-year policy five years ago doesn’t mean you can’t save money or expand your coverage for the same premium by switching companies. Unlike cash value life insurance, you have nothing to lose if you change plans. But you may have a lot of money to lose if you don’t change. And in today’s economic world we must make our dollars work harder for us!

48% of Americans die without leaving life insurance benefits

While the fact that 40% of Americans die without leaving any life insurance benefits is shocking, another 21% of Americans reported that a loved one died and did not leave enough life insurance behind. These statistics beg the question: why wouldn’t an earning spouse or parent buy life insurance to protect the future of their dependents?

A study found that many people put off buying life insurance because they find it all too confusing. I have very good news for those people! Term insurance is simple. Just choose the number of years you want coverage, get some rates, and then choose the least expensive policy.

Another reason many people don’t buy life insurance is because they don’t want to deal with an insurance agent. These people see insurance agents as little more than salespeople, and no one wants to be sold. There is also very good news on this front. As a result of technological advances, there are websites like mine where you can get a quote and sign up without having to speak to an insurance agent, unless of course you want to!

Term life insurance has never been cheaper

A 35-year-old non-smoker can get $100,000 of twenty-year term life insurance for $9 a month. This same person can leave her family with the same $250,000 twenty-year term life insurance policy for just $4 a month more.

So don’t stop protecting your family’s financial future.