How Long Do I need My Life Insurance?

family-backgroundIn order to answer the question of how long you need your life insurance, there are several considerations. Generally speaking, the purpose of Term Life Insurance is to replace the income of the insured should something happen to him or her. That being said, it usually is advisable for a policy to carry out close to retirement years. However, the cost of 30 year Term Policies are significantly more than the cost of 20 Year Term policies, so many opt for a 20 year term.

What happens at the end of my Term is one of the most common questions asked by our clients. First of all, if you are still living at the end of your policy—congratulations! You did your job and your family did not have to collect on your life insurance which was purchased for the worst case scenario…that is good news!

It should be said that clients never call 10 years down the road and tell me they wish they never locked in the 20 year rate!  But, I routinely hear clients regretting the face they did not lock in their rate when they were younger and healthier, once they see how the premium cost increases over time.

No one can tell you how long you need to lock in your coverage, and it must be considered within the context of your budget.  In an ideal world we would all be obtaining the coverage to take us to retirement since the purpose of the insurance is in fact to replace our income if something should happen to us.  But, other common thresholds are covering the period of time until children are out of college or the mortgage is paid off.  The longer you can secure the coverage, within your budget the better!

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