Buying term life insurance is like renting your life insurance. It is very similar to getting a lease that you pay a flat rate for a period of time. You could have a 1 year lease or a 5 year lease. Life insurance companies have created different length level terms. The most popular are 10 year term, 15 year term, 20 year term, and 30 year term.
This is the most cost effective way to get coverage for a period of time. At the end of the level term period, the rate goes up very aggressively, similar to rent. Most term policyholders will drop their term when the rate goes up on the policy. Often times we will recommend some type of blend of term and permanent life insurance. When the level term period is over and the policy is dropped, then the client still has the permanent part of their insurance still in place. This approach can be a very good one as the term can cover much of the exposure during prime working years and the permanent can function as a smaller amount that will be in force after the term disappears. Many clients say, “I won’t need insurance at that point when the term ends”, but few know how they will feel at that point. Having some form of permanent at least gives you that option. If for some reason you truly don’t want the permanent plan at the end of the term, you can just cash in the cash value and walk away with that money. Often times, that can be as much or more than you put into the policy. If you want to get life insurance, there are a lot of companies competing for your business right now, so its a great time to apply.