Updated: Jul 24
Relatively few 30-year-olds die. The chance that you will be one of them is slim. But it’s not zero. When you die the depth of your loss will be deeply felt in the hearts of the people who love you, affecting every aspect of their daily lives.
One way you can help their financial lives be easier after you die is by buying term life insurance. It's not expensive, and it can make all the difference for your beloved family.
Term life insurance is a type of life insurance that provides a death benefit to your beneficiaries if you die while the policy is in force. The death benefit can be used to cover a variety of expenses, such as:
Term life insurance is much less expensive than other types of life insurance, such as whole life insurance because it provides coverage for a specified period of time, such as 10, 20, or 30 years.
Why is term life good for young families?
It can provide financial security for your family in the event of your death. If you die, your family may be left with a large financial burden. Term life insurance pays a death benefit that they can use to pay for their living expenses.
It can help your family achieve their financial goals. If you have a mortgage, student loans, or other debts, term life insurance can help your family to pay those debts off in the event of your death. This will free up their income so that they can focus on other financial goals, such as saving for retirement or college.
It can help your children to get a good education. If you die before your children are finished with college, term life insurance can help to pay for their tuition. It gives them the opportunity to get a good education, regardless of what happens to you.
If you are considering purchasing term life insurance, there are a few things you need to keep in mind:
The amount of coverage you need will depend on your individual circumstances. You will need to factor in your family's financial needs, such as your mortgage, childcare costs, and college tuition.
The length of the term affects the cost of the policy. A longer term will typically be more expensive than a shorter term.
Your health may affect the cost of the policy if a medical exam or questionnaire is required. If you have a chronic health condition, you may be considered a higher risk and have to pay higher premiums.
Once you have decided how much coverage you need and how long you want the term to be, you can start shopping for quotes from different insurance companies. Compare quotes from a variety of companies to get the best deal.
Here are some examples of the cost of term life insurance:
A 30-year, $250,000 term life insurance policy for a healthy 30-year-old male could cost around $50 per month.
A 20-year, $500,000 term life insurance policy for a healthy 40-year-old female could cost around $100 per month.
These are just estimates, and the actual cost of your policy will depend on your individual circumstances. However, these examples should give you a general idea of how much term life insurance costs.
If you have a family, then term life insurance is an important financial protection. It can help to ensure that your loved ones are financially secure in the event of your death. Here are some additional reasons why term life insurance is important for families:
It can provide peace of mind. Knowing that your family will be financially secure if you die can give you peace of mind.
It can help to protect your family's assets. If you die without life insurance, your family may have to sell your home or other assets to pay for your funeral and other expenses.
It can help to preserve your family's financial future. Life insurance can provide your family with the money they need to pay for college, start a business, or simply live comfortably.
Company-provided term life insurance is a type of life insurance that is offered by employers to their employees. It is a group term life insurance policy, which means that the insurance company provides coverage to a group of people, such as all employees of a company.
Company-provided term life insurance offers many benefits. It is often free or very low cost for employees because the employer typically pays the premiums for the policy. Second, company-provided term life insurance is usually easy to get. Employees typically do not have to undergo a medical exam to qualify for coverage.
However, there are also some drawbacks to company-provided term life insurance. The amount of coverage is often limited. The employer may only offer a certain amount of coverage per employee, or the coverage may be capped at a certain percentage of an employee's salary. Second, company-provided term life insurance is not portable. This means that if you leave your job, you will not be able to take the policy with you.
Company-provided term life insurance can be a valuable benefit for employees. However, it is important to understand the limitations of the policy before you sign up.
Here are some of the key things to consider about company-provided term life insurance:
Coverage amount: The amount of coverage offered by company-provided term life insurance varies from employer to employer. Some employers may only offer a small amount of coverage, while others may offer more generous coverage.
Premiums: The premiums for company-provided term life insurance are usually paid by the employer. However, in some cases, employees may be required to pay a portion of the premiums.
Renewability: Company-provided term life insurance policies are renewable at each anniversary. You can continue the policy as long as you are employed by the company.
Conversion: In some cases, you may be able to convert your company-provided term life insurance policy to a permanent policy when you leave the company. This would allow you to keep the coverage even if you are no longer employed by the company.
If you are considering company-provided term life insurance, it is important to talk to your employer's HR department to learn more about the specific policy that is offered.
If you are considering purchasing term life insurance, do your research and compare quotes from a variety of companies. Term life insurance can be valuable financial protection for your family, and it is something that you should seriously consider if you have loved ones who depend on you financially.
Kathryn Hauer, a Certified Financial Planner ™, adjunct professor, and financial literacy educator has written numerous articles and several books including the “11-Step, DIY, Comprehensive Financial Plan Workbook” and “Financial Advice for Blue Collar America.” She works to help clients and readers understand and act on complex financial information to keep them and their money safe. She functions as a strong advocate and guiding light for her clients as they move through murky and unfamiliar financial and career worlds. Read more at her website.