Understanding Term Life Insurance: A Guide for First-Time Buyers

Life changes rapidly, and with milestones like buying a home, having a child, or switching jobs, reassessing your financial priorities becomes essential. One aspect you might be exploring is term life insurance — a straightforward and affordable way to financially protect your loved ones.

What Is Term Life Insurance?

Term life insurance is one of the simplest and most affordable forms of life insurance available. You select a term length — typically 10, 20, or 30 years — and a coverage amount. If you pass away during this term, your loved ones receive a tax-free payout.

Why Act Now?

Did you know that 102 million U.S. adults have no or insufficient life insurance, and that 72% of Americans overestimate term life insurance costs? Additionally, rates are trending upward, especially for older buyers. Securing a policy now could mean locking in lower premiums while you're younger.

Options for Term Policies

There are several types of term policies to consider:

• Level Term: Premiums and death benefit remain constant throughout the term.
• Yearly Renewable Term: Premiums increase with age, but coverage renews annually.
• Decreasing Term: Often used with mortgages; the death benefit decreases over time, but premiums remain stable.

When It’s Time to Reassess Existing Coverage

Life doesn’t stay static, and neither should your insurance coverage. If you've taken on new debt, had children, lost employer coverage, experienced a significant income change, or simply want to secure lower premiums while you’re younger, consider reassessing your term life needs. Instead of canceling current policies, consider layering additional coverage.

Use Cases for the Payout

The payout from term life insurance can be used to cover various expenses, such as mortgage payments, funeral costs, living expenses, or college tuition, ensuring your loved ones remain financially secure.

Additional Features to Consider

• Return-of-Premium Rider: Allows you to receive a refund of premiums paid if you outlive the term, though this comes at a higher cost.
• Convertible Term: Gives you the option to switch to permanent coverage later on without a medical exam.

Empower Yourself with Knowledge

Affordable and effective protection is within reach, and taking small steps today can provide peace of mind for tomorrow. Assess your current situation and speak with a licensed insurance advisor about term life insurance options tailored to your needs. Life’s milestones may change, but your financial protection doesn't have to lag behind.