There is a running debate over what kind of life insurance is best, term life insurance or whole life insurance. Basically, term life is less expensive, but it does run out without accruing the cash value and benefits of much more expensive whole life policies. In general, people who can’t afford or who don’t want the expense of whole life insurance are most apt to choose a term life policy, which can provide great benefits if you pass away at an early age, leaving your family with many years of living expenses to deal with. Burial costs by themselves can seriously hurt a young family that has just lost a major breadwinner.
Below is a list that includes a number of scenarios in which term life policies can be a real boon, along with a couple of cautions.
- Young Families – Couples who are just starting families are good candidates for term life policies. The cost is substantially less than a whole life plan, and many term life packages can gradually be converted to whole life over time if it is so desired.
- Income – Sometimes term life is the only option for those whose income won’t support a whole life policy. If your income prospects are likely to improve you may consider gradually shifting from just term life to a combination with a whole life policy. Term life allows more people to have insurance coverage even early in their careers.
- Healthy – Term life rates are the least expensive for young healthy people, particularly non-smokers.
- Existing Families – If your family is uninsured or under-insured you may need to consider adding a term life program, which would benefit your family immediately if something should happen to you.
- Single Adults – With the price of a burial mounting dramatically every year even singles may want to consider a term life policy, especially if they are supporting an elderly family member.
- Couples – Even couples without children can utilize the benefits of a term policy, especially if the surviving spouse may not be able to get by on an existing salary.
- Elderly – Older folks may think about a policy in order to spare survivors any burial expenses, but caution must be exercised. A term policy may be difficult for an older person to qualify for unless he or she is in remarkable health and the policy is likely to be quite costly.
- Divorce – A divorce will certainly change your life and your life insurance needs, but remember that it is still important for your ex to be able to support your mutual children in the event of your passing.
- Gaps – You don’t want gaps in your coverage which could allow certain medical conditions to become pre-existing conditions, and term life is easier to keep up with than whole life costs.
- Kids – Although, the thought of the mortality of children is not one we like to deal with, the death of a child is an extremely traumatic event, inexpensive term life policies on children can prevent the addition of financial loss to an already devastating situation.
You can do a lot of your own research online or you may wish to consult your local agent for advice about your particular situation.