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Is Term Life Insurance Right for Me? - Written by Sam Detke in Portland, OR Thumbnail

Is Term Life Insurance Right for Me? - Written by Sam Detke in Portland, OR

Is term life insurance right for me? The answer is it depends. Different types of life insurance make sense for different situations. Term insurance is a simple concept: You pay fixed premiums for a set amount of time.  If you pass away within that time, your beneficiaries receive the face amount.   If you don’t, you are out the premiums and your beneficiaries receive nothing. The concept is simple, but it doesn't answer the question, does term insurance make sense for me?


Term insurance is a great fit when the need for coverage is temporary. Let's analyze the situation of a married couple, Tom and Kate. Tom and Kate are married and have 2 kids. They will be the recipient of a large sum of money in 5 years which will effectively double their net worth. They are shopping for life insurance and unsure on which type to purchase. Currently Tom and Kate have little to no savings and want to be protected in the case of an early death.


Tom and Kate would be a great candidate for term insurance because their need for protection is temporary and not permanent. In this situation the couple needs temporary coverage until they receive the large sum of money. Once they receive the money, they would no longer need insurance since they will have assets to pass on in the case of death. Term insurance would be best suited for this couple. Term insurance is a cost-effective way to protect and provide for loved ones in the event of a premature death.


If you would like to learn more about how life insurance fits into your financial picture, please schedule a meeting with me here.