Life insurance is one of the most critical components of your long term financial wellbeing. With so many options available for life insurance—mainly including universal life insurance, term life insurance, and whole life insurance—it can be challenging to choose a plan that best suits your requirements.
The range of choices may boggle your mind at first; however, if you know exactly why you need life insurance, the choosing process will eventually become easier.
For instance, if you can define the amount you expect to receive over a known time period—just like your retirement plan—in this case, term life insurance would be the best life insurance option.
On the other hand, if you’d like fund an orphanage with your returns, you probably require an indefinite lifelong coverage, which is best provided by a permanent life insurance plan.
In this blog, we’ll have a closer look at how you can pick the best term life insurance plan for yourself.
But first, let’s start with an overview of what term life insurance is.
What Is Term Life Insurance?
It binds the insurance company and the policyholder in a legal agreement that offers financial safety and stability to the beneficiaries of the insured person, after they pass away.
Most people choose the term life insurance for following reasons:
- Providing financial stability to the family when they are no longer around.
- Covering the mortgage length.
- Covering other loans that are paid on installments.
Covering children’s education until they graduate.
How to Pick the Right Term Life Insurance Plan?
Choose the Length
To pick a suitable term life insurance length, consider why you need the coverage and how many years will it take. For instance, you may consider the number of years you have to pay back a certain debt.
Term life insurance is most commonly available in 5, 10, 15, 20, 25, and 30 year terms. However, some companies may even offer a term insurance length of 35 and 40 years.
According to the Milliman Research Report,
- 42 percent of term life buyers have chosen 20 years plan
- 25 percent of term life buyers have chosen 10 years plan
- 15 percent of term life buyers have chose 15 years plan
- Finally, 5 percent of term life buyers get their policy renewed every year at a premium
Decide the Amount of Term Life Insurance
You can set the amount for your insurance by considering the amount of debt you’re liable to pay, the accumulated education expense till your child graduates, or any other. Make sure you carefully do the math before confirming.
According to Life Insurance Barometer released in 2019, most people are investing in term life insurance for income replacement. If that’s your goal too, then calculate an accurate amount that your family may require over the coverage period.
Prepare for the Unexpected
While you’re at the deciding the amount and length, there are several other factors that may have an impact on your life insurance rates, including:
- Your age
- Immediate family’s medical history
- History of alcohol, nicotine, and other substance abuse
- Luxurious hobbies and foreign travelling plans
- Criminal record
To learn more about the types of term life insurance and other details, get in touch with the best life term insurance broker FL. At IFG Insurance brokerage, we provide you with in-depth consultations and make sure that you pick the most suitable term life insurance FL.
For a no obligation quote, call us today at (800) 381-1245!