Why Every Young Family Needs Term Life Insurance

No one enjoys thinking about how their family would fare if they were to pass away unexpectedly early. Life insurance can be a sensitive subject, and for that reason, many people avoid it altogether. But if I told you that life insurance could be quick, affordable, and effortless to keep in place, would you be more interested? Term life insurance is exactly that. You may be surprised at how cheap your coverage can be, depending on your age and health status.

How Life Insurance Can Help Your Family

Why buy life insurance in the first place? If you are a provider for a young family or have people depending on you for support, it is paramount to have sufficient life insurance coverage to take care of them in the event of your untimely passing. The loss of the primary income earner can have devastating consequences for the young family left behind.

Life insurance offers a way to address significant expenses like mortgage payments, debts, essential living costs (such as food, utilities, and transportation), and future educational expenses. The death benefit of a life insurance policy can provide a financial safety net, allowing your family to continue their lifestyle and pursuits. While life insurance cannot replace you, it can replace your income and provide financial support to your mourning family.

What to Consider When Buying a Policy

Now that you understand the value of life insurance, let’s look at key considerations for purchasing it. In almost every case, the best coverage for a young family is “term” life insurance. Term is the most affordable life insurance because it is purely insurance that you buy for a specific term (typically 10, 20, or 30 years); the policy has no cash value or other features.

Other forms of insurance (whole life, universal life, and others) are not purely insurance; you pay for the policy to have other features and cash value. These insurance policies are typically pitched to you as an investment vehicle. As far as insurance and investments are concerned, these permanent life policies are usually the worst of both worlds, and the costs are also increased by the commission being paid to the insurance agent who sold the policy. Let insurance be insurance, and investments be investments; the two do not mix well.

When shopping for insurance, only look for term policies, for a set number of years. This insurance will cost a fraction of what other types of insurance will cost you and will be an affordable option to get your family the coverage they need.

A Safety Net for When the Worst Happens

When it comes to life insurance, remember: If you have a family or any dependents, you need it. This insurance will replace your income in the event of your untimely passing. For the most affordable and efficient insurance, go with term life insurance. Start building a relationship with a trusted, fiduciary financial advisor who can help guide your family through this difficult time. Life insurance will not replace you, but it will take care of your loved ones if the worst happens.

Zac Pohlenz, CFP®

As a Wealth Advisor, Zac works every day to help clients reach their financial goals, and finds it satisfying to know that he has helped someone gain a new perspective that can help change their life.