Getting married and having kids is an exciting chapter in life. But life is always full of unexpected events. As a result, having life insurance is vital for young families with kids. Life insurance comes in several forms, but term life is often the best option for this situation. Here is an explanation of how term life insurance works and why young families benefit from it.
How term life insurance works
Term life insurance lasts for a period of time. You get to choose the time, and the agent can give you options. For example, you might choose a 15-year term for coverage for 15 years. The policy provides a payout upon death if the death occurs within the term. If you outlive the policy, you won't receive a payout. You can extend a policy for a longer term or convert it to a different plan. For example, you can purchase a whole life insurance policy, which is a type that doesn't have an expiration date.
Reasons young families need it
You might wonder why people would purchase a life insurance policy that expires. One of the top reasons is to have protection. You might want to protect your family when you're young and have a spouse and kids. This is especially true if you're the primary breadwinner, as your family would suffer financially if you suddenly died. Your family can have the financial protection they need by purchasing a life insurance policy for a term. You could choose a plan that would cover all their expenses. For example, it could be enough to pay off the house loan balance, alleviating this major expense for your family.
Secondly, term insurance is more affordable. Therefore, these plans offer a way for people to buy life insurance without going broke. If you compare the rates of term plans vs. whole plans, you'll see a big difference.
Finally, young people often purchase these because they're not financially secure yet. However, by the time they reach their 40s or 50s, they might be in a much better position financially. Therefore, they need protection now, but they might not need it later in life.
Buy a policy today
You can learn more about term life insurance and other types by contacting a life insurance agent. They can answer your questions and provide you with quotes for coverage. Contact an agent of your choice today to get started.
Insurance is something that I carry in the hopes that it never has to be used. Along with life coverage, I also have low cost auto insurance and a health plan through my employer. I'm toying with the idea of adding some additional coverage, just in case something happens and I'm no longer around to take care of my family. The question that is on my mind is how much insurance is enough? Do I really need more, or would it be better to cultivate other assets that my loved ones can draw on if needed? If you are in the same boat, let's journey together for a while. Read on and I'll explain what I'm trying and why. Together, we can figure out when it is time to add more coverage and when enough really is enough.