When reviewing policies on an insurance policy comparison website like InsureChance, you will find that there is a variety of life insurance terms to choose from. Some of these terms are designed to cover you with life insurance for a short period of time while others are designed to cover you for the rest of your life. So how do you know which term is right for you? Here are some clues that will help you determine which life insurance term will work best for you and your family.
Financially Supporting Your Spouse
The most common reason for purchasing a life insurance policy is to ensure that your spouse will be able to financially care for your family in the event that you die unexpectedly. This is especially important if your spouse depends on your income to make ends meet or stays at home with the children while you work outside of the home. In these cases, you will want to focus on a life insurance policy with a term that will last until you retire. If you cannot currently afford a life insurance policy with a term that long, you should consider purchasing a policy with a 10-year term today and purchase a higher value policy with a longer term in the future when it is more affordable on your income.
Financially Supporting Your Children
Some people purchase life insurance policies to primarily provide financial support for their children if they were to die before their children reach adulthood. If your children are young when you obtain the life insurance policy, then a term of 20 or 25 years will provide them with the financial protection that they would need if anything were to happen to you. If you have additional children down the road, you may want to consider purchasing an additional 10-year term policy to ensure that all of the children will be financially protected until they become adults.
Covering Debts And Funeral Expenses
Another common reason for purchasing a life insurance policy is being able to cover your debts and funeral expenses after you die without your spouse or your children having to give up assets that the family has accumulated over the years. These life insurance policies typically have lower payouts than policies designed to financially support your family members, so you should be able to get a policy with a longer term for an affordable premium. It is important to calculate whether the payout is worth the costs of paying the premium for years, as it may be more cost effective to put the money that would have gone towards paying the premium for the policy into a savings account with a designated use.