Oct 25 (edited) • General discussion
What the Term?!
How much do you know about term life insurance? Did you know there is an old term and a new term option? What does that even mean?
Term life insurance is exactly what it sounds like. You are paying for coverage for a specific period of time, and once that time period is up, so is the coverage on your life. Originally, the only way the life insurance company would pay out is if the person covered, passed away during that time period. And it was generally only used 2% of the time, because you had to die for your loved ones to get paid!
Often times I hear people say, “Why would anyone pay for that?!” Well there are really great reasons.
If you split the bills with someone in your household, and they pass away, do you know how you’ll cover their portion of the bills, long term?
If you own a home but still have an extremely large mortgage, do you want your loved ones taking on that giant bill and responsibility?
If you have small children (they’re expensive) will they be taken care of and have enough money over the next ten years after you pass away?
If you answered “no” to any of these, then even this old term would be a great option to cover and protect additional hardships, above and beyond the emotional hardship of losing a loved one.
And term life insurance is the cheapest of all insurances, if you get it at a younger age and you are healthy. Someone who is older and has maybe already saved the bulk of their retirement has less liability and therefore maybe less need for term insurance.
So why aren’t we taught about this in school either before or right when we would need it most…
just after college,
when we join the workforce,
when we are starting a family,
and/or when we buy a home???!
And now, how is new term life insurance even better? Remember how you had to die to use the old term? Well, for your loved ones to use it? What if you can actually protect YOURSELF with it too?! Cause now you can. New term life insurance is actually used 30% more of the time. Not only does it still serve the purpose or covering your debts and liabilities and protecting your loved one’s futures if you pass away, but it also will pay out to you if you are diagnosed with a chronic, critical, or terminal illness, or if you are severely injured and cannot perform 2 of the 6 activities of daily living, i.e. walking, eating, bathing, sitting, transferring, or continence. So what does this mean?
If you get injured tomorrow, and cannot work how long can you continue to cover your bills? Can you cover them past 3 months, 4 months, 6 months? How about for a year? Can you stay afloat for two years? How many times have you seen a family abruptly turn to a GoFundMe to try and survive? What if you could pay just penny’s to the dollar to have all the money you’d need to cover your bills while you are unable to work?
Some may argue that this still isn’t worth the monthly bill if it’s possibly something you never use and just lose out on the investment. I get that. So it’s exciting to know that new term insurance (depending on the product) can also be converted into a permanent life insurance plan, without going through a medical background check!
What that means is, if someone did get a really cheap term insurance plan early on, and then 5 years later, they received a medical diagnosis that would keep them from being able to be approved for insurance ever again, they can still take that term insurance and convert it into something they can keep for the rest of their life. And a permanent insurance plan can also act as a second savings account where you grow your money and savings for yourself later in life (such as retirement). You can even pass the money to your loved one’s tax free as well, if you don’t use it in your lifetime. It isn’t lost forever. Don’t even get us started on all the benefits of perminent insurance! We’ll save that for another post. 😉
We’d love to know if you’ve learned something new about term life insurance. What didn’t you know about it before reading this post? Would you want to learn more? Let us know!
#termlife #terminsurance #termvsperm #themoreyouknow #properprotection
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What the Term?!
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