We know how difficult it can be to understand everything that goes into life insurance. With so many different types, it can be hard to decide which one fits your family’s needs best. 

That’s why Kurt’s breaking it all down for you. By the end, you’ll understand the pros and cons of Term Life Insurance and whether it might be the right choice for you.

Types of Life Insurance: Term vs. Permanent

·  There are two main categories of life insurance: term and permanent (whole) life. To keep things simple, this episode focuses mainly on term life insurance.

·  Term life insurance coverage lasts for a specific period (from as little as one year up to forty years) with guaranteed premiums and a death benefit if the policyholder passes away during that term.

Practical Uses for Term Insurance

·  Why is term insurance particularly attractive for young families, budget-conscious individuals, and business purposes (like buy-sell agreements or key person coverage)?

·  Its lower premiums compared to permanent policies make it an affordable way to obtain high coverage when you need it most.

Term Insurance Subtypes and Features

·  Once you understand the basics of term life insurance, it’s helpful to know that there are a few different variations—and each serves a slightly different purpose.

·  Kurt explains several common subtypes you might come across:

o  Convertible Term: Lets you switch to a permanent policy later on without taking another medical exam—a big advantage if your health changes over time.

o  Return of Premium (ROP): Refunds the premiums you’ve paid if you outlive the policy term. It costs more than standard term insurance, but still less than a permanent plan.

o  Decreasing (Mortgage) Term: Designed to match a declining debt, like a mortgage. It was once popular but has become less common today.

o  Group Term: Often offered through employers. It’s convenient, but it typically comes with limited coverage and doesn’t always transfer if you change jobs.

Useful Riders and Considerations

·  We also go over policy riders—add-ons that can customize your coverage. These include options like critical or chronic illness protection and child or spouse riders. 

·  But be sure to look carefully at the fine print. Not every rider is worth the cost, and sometimes the added expense doesn’t match the actual level of risk or benefit.

Key Takeaways

·  Term life insurance is a flexible, affordable way to protect your family—but it’s important to understand that only a small percentage of policies ever pay out (less than 2%). 

·  That’s why we stress the importance of working with a professional who can help you choose coverage that fits your unique needs and goals. 

·  Also, review your policy regularly, especially as your income, debts, or family situation changes.

“A good rule of thumb: if you’re the primary breadwinner, aim for about ten times your income in coverage to protect your family. The goal of life insurance is simple—to replace income.” — Kurt