Life insurance is an important thing to have, especially if you are the breadwinner in your family and you have dependents who need support if you pass away. It can offer your family some financial security in your absence and greater peace of mind during the grieving process.
There are several types of life insurance out there, but the main distinction to understand is between term life insurance and permanent life insurance options. Some types of life insurance, like whole life insurance, offer protection for your entire life. Term life insurance, on the other hand, only lasts for a specified period, such as 10, 20, or 30 years.
If you’re weighing your options between term life insurance and whole life insurance, here are a couple signs that term life insurance may be the better option for you and your family:
- Lower Costs – Some people choose term life insurance because they want to be sure they will have sufficient coverage but can’t pay for the high premiums of permanent insurance.
- Flexibility – With term life insurance, you can typically choose a term ranging between a year to 30 years, depending on your needs. You might have a specific plan that makes the term length clear to you. For example, if you need significant coverage until your children become financially independent, you might choose a 20 or 30-year term life insurance policy.
- Easy to Understand – Term life insurance is simple; you pay a set amount, and you get coverage at a more affordable price. Permanent life insurance policies are more complicated, with things like a cash value component and investment options. You may not need the bells and whistles if you aren’t interested in permanent life insurance.