At some point in our lives, we all think about what would happen to our families when we are no longer there.
Who will pay the mortgage?
Who will take care of my children’s education?
Who will take care of the utility bills and medical expenses?
When all these questions start hitting your mind, you turn to term life insurance plans as your savior. While term life insurance is highly beneficial for your financial security and mental peace, it can also become a source of distress if you didn’t do proper financial planning earlier.
To reap the maximum benefits out of a term life insurance policy, avoid making these three common mistakes.
Purchasing Insufficient Coverage for Income Replacement
If your goal is to replace your income, the amount you choose for term life insurance should be 10 to 12 times higher than your current income.
If you’re the sole bread earner for your family, they are entirely dependent on you for every important thing. If you’re no longer there for them, you wouldn’t want them to suffer because of insufficient finances.
Delaying the Plan to Buy Life Insurance
No one likes to think about dying and leaving their family alone, but it’s to plan for the worst situation for the sake of your family’s protection. By waiting too long to purchase life insurance coverage, you’re not saving money; you’re just putting your loved ones’ security at risk.
The premiums paid on term life insurance typically rise as you age. So, the longer you live with insurance coverage, the more you’re leaving behind for your family’s support. Also, you may be at an increased risk of developing health conditions as you grow old, which may affect the purchasing cost of term life insurance and your eligibility.
Choosing a Short-Term Life Insurance Length
Though insurance companies offer term lengths of 5, 10, 15, 20, 25, 30, 35, and 40 years, it’s always safer to purchase a minimum of 15 to 20 years term. According to a Milliman Term Life Insurance Report, over 42% of people buy a 20-year plan, 25% purchase a 10-year plan, whereas 15% go for a 15-year plan.
You may think that buying a 5-year term life insurance will help you save money, but what if you develop a health condition during the term that increases the rates for your next term? If it’s just you and your spouse, you may go with a 15 to 20-year policy. However, if you have a larger family, it’s smarter to invest in a 30-year plan or a longer one.
For more information about life term insurance Orlando and other details, get in touch with the best term insurance broker FL. At IFG Insurance brokerage, we offer detailed consultations based on your requirements and other factors to make you end up picking the most suitable term life insurance in FL.
To receive a no-obligation quote today, call us at (800) 381-1245.