Are you looking for more affordable alternatives to whole life insurance? Whole life insurance may be the most common and popular type of insurance most of us are used to, but we are here to introduce term life insurance which could potentially be best suited for you and your family’s needs.
How Term Life Insurance works
Term Life Insurance is one of the easiest insurance plans to comprehend, with a simple payout structure. Premiums are paid usually on an ongoing or annual basis, and are usually around 10 times cheaper than whole life premiums. If the insured encounters permanent disability, terminal illness or death (depends on insurance providers) within a specified period of time or until a specified age, a lump sum payout is delivered to him and/or his family members. One of the most visible benefits of term life insurance would certainly be its affordability, with much lower premiums, rendering it more accessible for those who are unable to afford other policies such as whole life insurance and endowment policies.
So, is term life insurance suitable for you?
Given its shorter-term nature as compared to whole life insurance, term life insurance would be best in providing coverage and protection for those who are experiencing higher financial obligations currently and would like to seek out options which are more affordable. These groups of people may include young parents who have young children. With an additional dependent, parents may choose to take on term life insurance for extra protection at a lower cost as compared to whole life. Term life insurance offers the extra financial protection for the whole family for those 20-30 years, terminating when the young ones grow up and become financially independent, decreasing the family’s financial pressures. This may also be the case for those who have outstanding debts to pay off, or mortgages which an insured person does not wish to be forfeited for their family members in the case of their death or injuries leading to loss of income and inability to repay the debts or pay off the mortgages. Hence, term life would be suitable for them to tide over their period of higher monetary volatility and obligations, offering affordable protection. There may also be some who partake in occupations with higher risks, rendering extra protection for that period of time even more necessary.
Some, especially healthy and savvy young adults may also choose to subscribe to a term life insurance policy instead of a whole life plan, accruing greater savings for investments in other portfolios and assets.
Those who have a preference for whole life plans but are unable to afford one right now do not have to fret. Many term life policies do offer the opportunity for conversion to whole life policies up till a certain point, and it is perfectly fine to take up a term life policy now for the temporary protection and coverage.
With its affordability and comprehensive protection for policyholders for the specified period of time, term life insurance is indeed a robust alternative to whole life policies which anyone can and should consider.