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When to Get Term Life

     The question of when to get term life insurance canít be answered the same for everyone, unless the answer is ďThe timing is different for everyone.Ē Typically the time of life isnít the determining factor in buying term life insurance; rather it is circumstances and events that determine the timing for us. Insurance is typically purchased for a couple of reasons: 1. To pay debts incurred, and 2. Provide income for dependents. These reasons occur at different times of life for different people. A good way to find if the time is right for you on a personal level is to better understand the uses and applications associated with typical seasons of life.

Term Life at the Beginning

Most people just starting out in life donít have a lot of assets nor do they have a lot of indebtedness, with the exception of college student loans. In the beginning stages of life as an adult in the workforce, it is typical for small amounts of term insurance to be carried to cover the final burial expenses of the insured on behalf of the loved ones left behind. By the time a couple begins accruing assets, like a home (and the mortgage to go with it) thoughts of insurance start to form in their minds. A great way to use term life insurance when your income level is limited is when a mortgage is started. Usually home loans are for a period of 30 years, so people will use a 30 year decreasing term policy to ensure that if they die prior to the home being paid off, there is enough insurance available to pay off the home. A decreasing term policy will ensure that the costs for the policy remain fairly small, thus not burdening the home owner with a high insurance payment that canít be afforded in reality.

Term Life in Middle Age

By the time middle age is reached most people have established themselves financially and can afford some higher costs of insurance. Others, who donít wish to pay the higher costs of other insurance, may wish to buy a term policy and rely on their other investments to be an insurance policy of sorts. This is typically communicated as ďBuy term and invest the difference.Ē The concept is that instead of buying a whole life, variable life, or universal life insurance policy for a higher cost, one should spend their money on a term policy and then invest the difference in premium costs in a standard investment vehicle. With consistent investing on a monthly basis, the goal is to become self insured by the time the term policy has expired. There are many debates on whether this is preferable or not. It is prudent to consider this concept at the very least to determine if it is a tactic from which you might benefit.

Term Life after Middle Age

Most people entering their twilight years have a need for insurance, but often if they donít already have insurance, it can be cost prohibitive. Whether it is due to health issues or budget issues, it is typically not the best time in life to establish a term life policy. However, if there is a need for insurance and health conditions and budget do not preclude your from obtaining insurance, term insurance is probably the most affordable option at this time of life.

Article Source:

Steven Hart specializes in Life Insurance and Annuities, as he is also a licensed agent to sell these products. He has been featured on many life insurance blogs and websites as well as in many articles. To find out more about Life Insurance, check out his popular website!

Posted on 2010-09-28, By: *

* Click on the author's name to view their profile and articles!!!

Note: The content of this article solely conveys the opinion of its author.

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