How long do I want my coverage to last?

When you are buying life insurance, think about the specific reasons for buying it. Do you want to provide for your family in case something happens to you? Are you looking to create an estate to benefit your favorite charity? Would you like to know that the final expenses associated with your passing are covered so that your surviving family doesn’t have to be burdened with them? Whatever your reasons for buying life insurance are, there is a type of policy designed to cover the need.

If you want coverage to replace your income should something tragic happen to you, a Term Life policy is a good choice. In this case, you may want coverage until your minor children are adults, or until your surviving spouse has reached retirement age. A level term policy can fill these needs. Level term policies are typically available for 10 to 30 years. In addition, you can buy a return of premium (ROP) option which will return all of your premium payments to you at the end of the level term period.

If your needs are more permanent, you will want to consider a Universal Life or Whole Life policy. These types of policies are designed to last for your entire life. Many people choose to buy a “final expense” policy to pay for funeral and other related expenses. A permanent life insurance policy is the right choice here, because you can’t be certain that you won’t outlive any specified term.

Another good use of a permanent policy is for estate planning purposes. If you have illiquid assets like a business or real estate, you may have a use for life insurance in your estate plans. The proceeds (death benefit) from a life insurance policy can add liquidity to your estate, making the division of your assets among your heirs easier. In addition, the cash from a life insurance policy can be used to pay estate taxes–without forcing your heirs to sell valuable assets from your estate.

If you have questions about the length of time you want or need coverage to last, please feel free to contact us. A licensed agent will be happy to assist you.

About The Author

Richard Eddy

Founder of and Cona Financial Group Richard Eddy has been assisting clients with their life insurance needs since 2005. He is an expert helping people find the right policy to fit their specific situation. In addition to insurance planning, he is also experienced in a wide range of financial planning topics including investment and portfolio analysis, tax planning, retirement planning and estate preservation strategies. You can call Richard toll-free at (877) 883-3561.