You already know why you need term life insurance. And you must have figured out how much you need as well but things are not done yet. One of the important choices to make still remains and that is policy’s term length. In other words, how many years of term life insurance you need to buy?
At the end of term period, the price shoots up so high that most people let it expire, therefore it’s important to give a thought to this question before it’s too late.
Term Insurance is typically offered in 5-year increments within the range shown below:
Term policies come in many varieties as mentioned above. Most life insurance companies that sell term life insurance offer policies that can be a short as 5 years and as long as 30 years. Furthermore, there is added flexibility with these plans and policies that provide renewable term life insurance. Many consumers choose term insurance as an affordable, efficient and effective way to provide their families with the life insurance coverage security they need. Term life insurance, in this case, is not used as a long-term investment vehicle.
Consumers with long-term needs should be aware that if they keep a level term life insurance policy longer than the initial level premium guaranteed period, their premiums will increase substantially or may not renew.
There is no fancy formula to calculate this figure. Just grab a pen and answer the following questions:
Let’s say your answers look like this: 22 years, 15 years, 18 years, 12 years.
Your policy time frame will be the largest numbers of years in your answer. For this example, you will most likely purchase a 25-year policy to cover all your obligations. However, this is just a starting point. Your policy timeframe may shorten or lengthen depending on your situation. You may have some other insurance available through work or you may have some other needs longer than 25 years that are not listed here.
Life Insurance is made to give you a stress-free financial future, therefore, it’s important to buy a policy which best suits your needs. Do a thorough research and remember to discuss policy term lengths with your agent. Plan wisely so you don’t have regrets in future. If you have any question regarding term life insurance policy, leave a comment below. We are happy to help.