So, you’ve decided life insurance is a good decision for your family, now the question is should you purchase term insurance or permanent life insurance? This very personal decision should be based on your financial goals and the financial needs of your beneficiaries. Life insurance can be a flexible financial vehicle that can meet various financial objectives, like providing financial security or building financial assets and leaving a legacy.
So, if you have children and are the primary income earner or co-earner in your household, you might want to consider purchasing life insurance to cover your family’s financial obligations. Or if you are the primary care giver for the children, you may want to purchase life insurance to cover the cost of providing the care without you.
Adding up all of your living expenses, mortgage or rent, pay off debts, children’s education and other living expenses can help you decide the face value of the life insurance policy your family will need if you are gone. Term life insurance can provide the coverage at a lower cost but does not build equity and ends at the term of the policy. Permanent life insurance is more expensive but builds cash value in addition to the death benefit.
If your children are grown and on their own and your financial needs are different you may want a term policy to provide for final expenses or maybe a term or permanent policy to provide for your spouse’s needs after your passing.
As you can see, there are many factors to consider when deciding what term policy will be most beneficial and many different options to meet your needs.