You’ll have to decide the length of your life insurance policy before you buy it. How long will you need life coverage?
You will have a temporary, inexpensive life insurance policy if you purchase term-life insurance. If you select permanent insurance, your coverage is more expensive but will cover you throughout your life.
How long should I keep my term life insurance?
Term life insurance will not cover you throughout your life, unlike permanent life insurance like whole life or universal life. The term length will determine how long the policy will last. Your coverage needs will determine the term you choose.
Picking Your Term Length
You can select from a variety of term lengths for your term life insurance. Most common are 10 year term 20 year term and 30 years term. There are other terms available. Other terms are available, such as 15, 25,35…and even a 40-year term.
Ten-Year Term
Short-term coverage is a 10-year policy. Sometimes, it’s used to cover unexpected situations.
- You may have refinanced your house or incurred debts for only a few short years.
- You may have a 10 year business loan for which your lender will require life insurance.
- You may have a medical condition which will make long-term coverage unaffordable. You can purchase a 10-year term until your health improves, and you can obtain a lower rate.
Terms of 20 Years
The 20-year term has become a popular option for parents who want to cover their children until they are out of college and have grown up. This is also a good option for those who have less than 20 years left on their mortgage.
30 Year Term
Every life insurance company offers a 30-year policy as the standard. A 30-year policy is the most comprehensive coverage for all other insurance companies. This is a great choice for newlyweds or young professionals. This is a good choice for the family breadwinner.
Terms of 40 Years
Banner offers level premiums for up to forty years. Banner 40-year term offers long term coverage at an affordable rate.
Figure Out Your Coverage Length
You need to know why you are buying a term policy in order to determine how long it should last. Do you need only short-term coverage because you are nearing retirement? You need to replace your income for 30 years. The length of your coverage depends on the goals you have for it.
How long should your life insurance policy be? Here are 3 easy ways to determine this.
1. Cost
It’s better to have some coverage than none at all. You should only buy a affordable term life insurance policy. Do not buy a life insurance policy that you will have trouble paying for. You do not want to buy a policy which will expire in a couple of years.
2. Age
What age are you? When will your term life insurance policy expire? You may need to purchase another policy once your term has ended. The age of the insured is a major factor in determining your premium. You should do this now to avoid any unpleasant surprises.
3. Goals
What are the main goals of your coverage? Do they cover long-term or short-term needs? You may only need to purchase a policy that covers your burial and funeral expenses. You may be a millionaire who needs a policy in order to avoid estate tax or to leave inheritance. Life insurance has many different goals. These will determine the length of your policy.
4. You can also find out more about Mortgages
Have you got a Mortgage? How long will it take to pay off the mortgage? You should make sure that your policy covers your loan, as it is your largest asset and liability.
5. Retirement
When will you retire? When you retire , will your life insurance policy be needed? Your life insurance needs are different from someone who hasn’t invested and saved for retirement.
What is Permanent Life Insurance?
Term life insurance is not the best option if you want to be covered for your whole life. Permanent life insurance provides lifetime coverage. You’ll also have several options.
Universal Life Insurance
Guaranteed Universal Life Insurance (GUL) allows you to purchase a policy up to a certain age. GUL policies allow you to select an age at which the policy will be effective. You can, for example, buy Guaranteed Universal Life Insurance up to the age of 90, 95. 100. 105. 110. 121.
GUL can be a good option for older customers. When you are older and 30-year terms are not an option, GUL can be a great alternative. Most companies offer this option to those in their 60s.
What About Whole Life Insurance Policy?
Whole Life Insurance is a good option, but will cost you the most. You will receive lifetime coverage with a fixed premium. This is a great option for estate planning, cash value growth and high-net individuals.
Choose the best length for your family.
It’s important to consider what you want to protect when determining how long your insurance policy should last. Permanent life insurance is designed to give you complete peace of mind, as it provides coverage for your entire lifetime. Term life is the least expensive and easiest type of life insurance.