For many people, term life insurance does not offer the security they want for their later years. They worry that when a 30- or even 20-year term policy expires, they may not be insurable, or that changes in their health, weight, or age will make another term life insurance policy unaffordable. Such consumers value the guaranteed insurability and fixed pricing of permanent life insurance. They may balk, however, at committing a single death benefit and premium amount early in life, knowing that inflation and changes in family size may require a larger death benefit later in life than they can afford at the time the contract is written. For such farsighted individuals, universal life insurance may be the perfect insurance product.

Many people think any kind of permanent life insurance is a waste of money. They argue that a person needs life insurance for only part of a lifetime: those years when an individual is responsible for supporting a family. They reason that if a person dies after the children are living on their own, the surviving spouse ought to be able to support himself or herself without the help of a life insurance death benefit. According to this logic, a term life insurance policy that covers the 20- to 30-year span when an individual is supporting his or her family is all a person should need. Since the odds of a person in his or her twenties or thirties outliving a term life insurance policy are great, term life insurance is the least expensive type of insurance a younger adult can buy.

Filed under: Life Insurance