Wiz insurance – If you stop and think about all the time, effort and energy you have put into creating your family’s assets and your family itself, can you say that you have accumulated enough financial resources that your family would be secure upon your death or the death of your spouse? Or, would it be more likely that you or your spouse’s loss would financially devastate your family?
Generally, term life insurance is taken out to protect your loved ones from debts. For example, if you and your spouse own a home, and you were to suddenly die, your spouse could potentially pay off the mortgage instead of worrying how he or she will make the monthly mortgage payments alone. A term life insurance policy could also enable your spouse to pay off any of your existing credit card or other miscellaneous debts as all of those are passed down to your survivors.
Additionally, if you have children or if your spouse does not work, term life insurance can protect your family’s finances by providing money for college and living expenses if you die before your children are fully-grown. Your survivors can maintain their lifestyle, as they currently know it. To be sure, buying term life insurance gives your family peace of mind knowing they would be financially protected should the unthinkable occur.
Figuring out the Length of Term You Should Purchase
When determining what kind of term life policy you should buy, ask yourself the following questions:
- What is your income? The rule of thumb is to buy 10 times your annual salary.
- What are your short-term debts? Credit cards, car payments?
- What are your long-term debts or financial obligations? For example, do you need money for future college educations?
- What is the remainder of your mortgage?
The answers to these questions will help you determine how long a term to buy. Whether you buy a 10, 20, or 30-year policy is determined by your total debts, financial needs, and the needs of your dependents. If your children are almost financially independent, then you can purchase a shorter term — unless, of course, your spouse might need more financial support or if there are other relatives who depend on you for money. You can also buy term life insurance that covers you until you reach a certain age, usually 65 or 70. Just keep in mind that term life insurance policies expire at a set time and premiums usually increase upon renewal.