Losing a family member is one of the most dreaded events in our lives. It is difficult to imagine the pain that the family will have to endure for the loss. Breadwinners would worry more about how the people depending on them for support are going to cope with their daily needs and other necessary expenses.
It is difficult for a bereaved family to manage their emotions and be concerned with the funeral expenses at the same time. Over the next ten years, prices for funeral and memorial services are expected to double according to the National Funeral Directors Association. At present, the average price starts at about $8,500.
Every family can prepare for the costs that come with the risk of the passing away of a loved one. Getting a term life insurance for the family is the most economical way to be ready with life’s unexpected events.
Advantages of Term Life Insurance
It may not be a good thought but it is life’s reality that we all die. Purchasing a life insurance policy is the best and simplest way to have our families ready for the worst to happen. A level term insurance policy is the most inexpensive way to be prepared. With term insurance, you are going to select the policy term and you will only pay for the selected term’s policy fee plus the cost of insurance.
The purchase of the policy can either be annually or according to terms. The available terms are 5, 10, 20, and even 30 years. Commonly, a renewal policy will be offered by the company when the term is near its expiry date. The insured’s present age will be the basis of the policy to be renewed. Because of this, a higher fee is expected but still, the payment is only for the policy fee and the cost of insurance.
Generally, the amount that you will need for the insurance at renewal may be lesser. If your mortgage will be paid off and you will have less debt, the face amount can be reduced. This will result in a premium lower than what you pay for the original policy.
The Benefits Included in Term Life Insurance
Acquiring term insurance for the family gives you a policy that is not only affordable (when purchased early) but also guaranteed. Moreover, the policy does not only contain a death benefit but it also comes with terminal illness benefits.
Terminal illness benefit is offered by most insurance companies at no extra charge. If the policyholder is diagnosed with a terminal illness or has to stay in a nursing home for the rest of his or her life because of a terminal illness, the insured is allowed access of up to 100% of the death benefit.
In addition, many companies allow all or a portion of the term policy to be converted to a permanent policy such as universal life or whole life insurance policy. Proof of insurability is no longer required during conversion. This is very helpful especially for people who are diagnosed with an illness. With the possibility of having the term policy outlived, it would be a wise decision to convert a permanent policy without having to worry about the present health status.
It is very easy to have a term life insurance policy for the family. The head of the family will be the named insured and the primary named insured in the policy. An additional insured, such as the spouse, can be added. The face amount for the latter will be up to the named insured’s limit.
Most companies offer the Child Term Rider (CTR). It allows the inclusion of the children in the coverage of the policy. This is truly an efficient way to cover all members of the family in one policy eliminating the policy fees that would be charged if each child has separate policies. All children in the family, including those who are born or adopted after the issuance of the policy, will be covered by the CTR death benefit.
In the absence of the rider, purchasing separate policies for each child in the family will still be advantageous because it would incur a minimal cost. Term insurance is priced very low for children or teenagers. It is normal for parents to be hesitant in discussing about getting insurance for their children. But death knows no age and it is a smart move for parents to be prepared. It would be difficult to think about losing a child and have nothing to pay for the funeral. Getting affordable insurance is way better than borrowing money or asking help from other relatives to spend for the memorial services. Having an insurance policy prepared lets you deal with grief without having to worry about the money matters involved.
Taking Advantage of the Conversion Privilege
At a very reasonable amount, you can create a life insurance plan for your family with a term insurance policy. The benefits that the policy can provide when the worst things come definitely give value for money. Of course, as much as we can control, we do not want to avail of the benefits soon but we just want to be prepared earlier when it is still a very practical option. You might be tempted to choose the cheaper accidental death policy. But it is actually a matter of choosing between an insurance policy that is cheap or an insurance policy that is good.
One of the great benefits that come with term insurance is the conversion privilege. It allows conversion of the term policy to a permanent policy such as whole life or universal life insurance. So instead of buying a lower amount of permanent insurance and letting the term insurance expire, you can take advantage of the conversion privilege. All or a portion of the term policy may be converted without the need to prove that you or your spouse are healthy at the time of conversion. This means that any health issues that may have developed along the way will no longer be a concern.
The insurance premium for the new policy will be based on your age at the time of conversion and the price of the permanent product. But at this stage, you are likely to need less life insurance meaning you will still pay affordable premiums. Moreover, you won’t have to deal with health questions and medical exams.
Finding the Best Family Term Life Insurance
BBI Financial, Inc. is an independent insurance agency. We represent many insurance companies that are highly-rated and offer term life insurance at a low cost. Our insurance professionals will go through the offerings of multiple companies in order to give you the most affordable option that is well-suited for you and your family members’ needs.