Life insurance is a bit like lettuce. When you were a kid, if you ever actually thought about lettuce, you thought of it as a simple thing, and you knew exactly what it was. Then you got older, started buying your own food and shopping in fancier places, and realized there are numerous types of lettuce, with a variety of names and distinct functions (just try making a Ceasar salad without Romaine). After that realization, the straightforward greens of your youth seemed to wilt in your memory and become replaced by something more complex. Life insurance is the same: it seems simple until you actually look into it, and then you wonder what the names all mean.
How term life insurance works
Term life insurance is a simple, affordable type of life insurance policy that covers you for a set period of time (called the “term”), which typically comes in 10, 15, 20 or 30-year options. If you were to die during the term, your beneficiaries receive a policy payout in the amount of coverage you have chosen. For example, if you get a 20-year, $500,000 policy, if you die during the 20-year term, your insurance company will give your beneficiaries half a million dollars (the value of the policy). Yes, it’s that simple.
Both term and permanent policies meet the primary need of protecting those you love with the death benefit if you died. “Term” offers that protection for the duration of the term of your policy. “Permanent” life insurance provides coverage for the rest of your life and has a cash value component that can increase over time. Permanent policies are significantly more expensive than term policies, which can be a deterrent for many cost-conscious families.
So if you’re looking for a cash accumulation feature and are able to pay higher premiums, you may want to consider permanent life insurance. But if you’re young and healthy and are looking for simple and affordable coverage during the years you may need it the most, term life insurance may appeal to you.
Life insurance for people with a life
You budget online. You invest online. Why not apply for your life insurance online?
Read moreThis brings us to cost.
One of the things that characterizes term life insurance is that it’s surprisingly affordable. A 35-year-old woman in excellent health will pay around $21 a month for a 20-year, $500,000 Haven Term life insurance policy issued by MassMutual – probably a lot less than your phone bill.
With term life insurance, it’s also simple to choose a policy that fits your individual needs. For example, if you want to purchase a policy to protect your spouse from the new mortgage you two have taken on, you can pick a 30-year term and a face amount that’s equivalent to what you owe on the house. Or, if your dependents are young children, you can choose a coverage amount that will last until they are through college. Whatever your family situation, you can get a term policy based on your needs. Why pay for more coverage than you think you need?
If you have dependents, term life insurance can help you put affordable protection in place, for the years you need it the most, and you all get peace of mind today – and the process of getting it is straightforward. Online life insurance agencies like Haven Life offer simple life insurance quote tools so you can get an idea of cost in a couple of minutes. If you like what you see, you can apply for a policy online from the comfort of your home.
So in short, what best describes term life insurance? It’s a type of life insurance that is easy to apply for, which gives you the protection you want, for the duration you choose. And arguably, it’s simpler and more versatile than lettuce.
Michael Davis is a freelance writer and editor who has covered everything from fashion and music to parenting, work, and finance. He has been a chef, restaurateur and record label owner. Opinions are his own.
