Explaining Term Life Insurance
You may have heard that it's important, but what exactly is term life insurance? We put together some information that may help you when it comes to deciding on what policy is best for you. When you're ready, get your free life insurance quote and see just how affordable a term life policy can be.
What is term life insurance?
Term life insurance is a policy with a pre-set amount of coverage that is guaranteed for a certain amount of time or “term.” This option can be the most affordable of life insurance policies, as they generally have very low monthly payments, but rates could change once the term is up. The policy usually does not have a cash surrender or loan value.
Why do I need term life insurance?
Term life insurance can give you peace of mind when it comes to your family's financial health. Should the unthinkable happen, your policy could help pay for unexpected medical bills, school bills, funeral costs, and loss of income. No matter what your age, term life insurance can help support your family and loved ones after your passing. Learn more about how life insurance can help take care of your family .
What kind of benefits does term life insurance offer?
The average funeral costs between $8,000 and $10,000 in the United States, and according to the National Funeral Director's Association, that number has risen every year since 1960. A term life insurance policy of $15,000 could help cover the expenses of your funeral, plus provide a small financial cushion for your beneficiary. For more information, check out our infographic detailing the cost of a traditional funeral .
There are no hard and fast rules when it comes to debt and death, reports U.S. News and World Report. Depending on how your accounts are set up, the state you reside in, and the type of debt in question, certain family members could be on the hook for paying back your debt, says David Mendels , a certified financial planner with Creative Financial Concepts in New York. Here are two types of debt that could be lessened with the benefits of a term life policy.
Credit Card Debt: If you leave behind thousands of dollars in debt on credit cards, your family won't be on the hook to pay it back...unless one of them is a co-signer on the card or a "joint cardholder." A parent may co-sign with a child who's beginning to establish their credit, or an adult child may co-sign with their elderly parent to help keep track of expenses. Either way, credit card cosigners can inherit credit card debt, and this is a debt a term life policy could help pay off.
Auto Loan Debt: Car payments fall into a similar situation. If you pass away while you're still making car payments, the vehicle could be repossessed. If there is a cosigner on the vehicle loan, the cosigner will be expected to continue to make payments. The benefits of a term life policy could help settle outstanding auto loan debt.
Everyday Living Expenses
Take a look at the expenses in your family's monthly budget or a even a bank statement from last month. There are likely charges for gas, groceries, cell phone bills, cable bills, rent, electricity, water--the list goes on and on!
Without your income, could your family continue to pay these bills and make these kinds of purchases? Could your wife buy groceries worry-free? Could your kids buy new coats in winter? Nearly ⅓ of Americans feel that the loss of the primary earner in the household would be felt within the month. Another ⅓ have no idea, reports According to the 2015 Insurance Barometer Study . During a time of emotional stress, the benefits of a term life policy could help ease financial stress.
In particular, the benefits could help bridge the financial gap while other family members seek employment. The share of two-parent households in which both parents work full time now stands at 46%, up from 31% in 1970, reports the Pew Research Center . What's more, a 2013 survey reported that six in ten Americans believe you need dual incomes these days to afford your dreams. Without two incomes, or your income in particular, consider how would your family fare financially each month. Would there be financial stress?
Care for a Parent or Sibling
What if you're single, with no kids and no spouse? Think singles don't need life insurance? Think again. If you're taking care of parents, grandparents, or siblings, having a life insurance policy could help make sure that your dependents are cared for in the event of your death, or at least until another family member can make arrangements to take care of them.
Who gets the benefits of my life insurance policy?
You choose the beneficiary or beneficiaries for your policy. In the event of your death, your beneficiaries will receive the benefits listed on your policy as long as the term of your policy has not lapsed.
Is it difficult to get Term Life Insurance?
Direct makes it easy. There are no hoops to jump through, so can easily get covered. How easy? No medical exam is required -- simply answer a few health-related questions. We also offer flexible payment options -- you pick the due date of your payment to fit your budgeting needs. When you have auto insurance through Direct, you can pay for your auto and life policy at the same time and at the same place.
Can I get life insurance for my family?
You can insure yourself, your spouse, and your child (min. age 18 years old, max. age 60 years old). In addition, your policy is guaranteed to renew for two years at the same rate with no regard to your health, giving you and your family peace of mind.
Want to learn more?Direct Auto provides peace of mind when it comes to covering you and your family with features that include: one-year term life insurance that provides up to $25,000 of coverage; standalone life insurance so you have the option to insure other members of your family; guaranteed renewal for two years at the same rate without regard to your health.To learn more about our term life insurance or to get a free quote visit one of our knowledgeable agents at a location near you or call us at 1-877-GO-DIRECT (1-877-463-4732).
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