This is a question that really has no sensible answer, if you are already at the stage where you feel you need to have life insurance then the only question is do you want term or standard cover.
To make any kind of informed decision you really need to understand exactly what term life insurance coverage gives you that other life insurance doesn’t. The answer is finality and not much else.
With term insurance you pay a fixed amount per month for a fixed amount of time, if you die in that time your estate gets paid a fixed amount. If you don’t die you get nothing, well you do get the bonus of still being alive of course!
With a unlimited term insurance you just keep paying until the day you die and then your estate gets a payment. That is the most basic explanation of course as there are almost unlimited variations on it.
So which type of insurance is right for you? Well it depends on things like how old you are, if you have young family who you provide for and the costs are sure to be a factor as well. Usually term policies are cheaper than other types of life insurance, this is because the company providing the cover can work on fixed details. They know they only have to cover you for the next X number of years (normally 25) and they know how old you are now and other pertinent information.
With all that information and their actuarial tables they can work out the risk factor of you dying within the insured term. Combine the risk factor with the amount of payout and they can work out what to charge you monthly.
If you have kids who are already teenagers or maybe even grown then a 20 year policy may be more than enough to cover your needs. Life insurance is meant to cover your family members who are left behind and still would need some financial support from you if you were still around.
If your children are young and you have a mortgage then you will want to make sure your policy is long enough to cover right through till they are of an age where they should be out of university and also cover enough in financial terms to allow your spouse to pay off the mortgage and be left with something over besides.
Only you can decide whether term life insurance is right for you, but be sure to collect all the information first and look at it in your own time before you sign on the dotted line.
Related posts: