While adopting a healthier lifestyle is something every mom should do, the reality is that everyone has to go at some point in their lives. That’s why it’s so important for families to prepare for the inevitable by having a good, solid life insurance policy that is up-to-date.
Term life insurance can provide your family with valuable coverage that still comes at an affordable price. However, as with anything else out there, there are a few things that you need to know about term life insurance before you sign on the dotted line to start your policy.
What Is Term Life Insurance?
What is term life insurance? This is the first thing you should find out since there are many different choices for the types of life insurance on the market today. By definition, term life insurance is coverage for a determined number of years or a set term. The typical time period is 10, 15, 20, or even 30 years to be determined by you when you purchase your policy. It lasts for the time period you determine and a set death benefit would be paid to your beneficiary after your passing. Since this is term life insurance, you would have to either renew your existing policy or buy a new one if you wished to continue coverage after the policy expired.
What Term Life Insurance Covers
Another thing you should determine before making a decision on which life insurance coverage to purchase is what term life insurance covers. A few of the things your policy should cover for your spouse and children should you pass are listed below.
- Day-to-day bills
- The mortgage on the home
- Debts that are cosigned
- End-of-life expenses
- Dependent and child care expenses
- Stay-at-home parents
- Helps you to leave a legacy
These are a few of the things that your policy should cover for you once you’re gone. Check with your insurance agent to ensure this is the case with the policy you’re considering.
The Grace Period for Paying Your Bill
Most policies typically have a 31-day grace period when it comes to paying the bill. Of course, it’s always important to always pay your bills on time, but things do happen. What the 31 day grace period means is that if the bill isn’t paid by the due date, you can pay it during the 31 days that follow that due date without worry of cancellation. Your insurance will stay active during that period. However, if you were to pass away, it could end up with a reduction in the death benefits your loved ones receive.
Is Term Life Insurance Taxable?
This is a question that is answered often and the answer is no. Term life insurance isn’t taxable if your death benefits are left to a beneficiary that is a real person. If, however, an estate is the beneficiary or the death benefits go to a third party, then the benefits can become taxable. It’s best to discuss this question with your insurance provider when deciding whether term life insurance is the right choice for you.
Is Term Life Insurance Right for You?
One of the biggest things you need to know about term life insurance is whether it’s the right choice for you and your estate. Do this by doing your research, talking to your insurance company, and then taking the time needed to make the right decision.
These are just a few of the things that you need to know about term life insurance before you make a decision to purchase a policy. Do your research well, then make an informed decision.