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Is Cheap Term Life Insurance Enough?

October 4, 2012

For Frugal Consumers & Lifetime Savers, Cheap Term Life Insurance is the Only Need

cheap term life insuranceThe purpose of cheap term life insurance is to make sure that anyone financially dependent on an insured for groceries, daily necessities, transportation, housing, and medical care, to name just a few, is able to carry on successfully in the event of the insured’s death. An insured might be financially responsible to a spouse, children, stepchildren, elderly parents, foster children, or disabled siblings.

The average amount suggested by those in the industry is 8-10 times the insured’s annual income. This is, of course, an ideal number to aim for; if a lesser amount is all that can be purchased, it is better than nothing. These goals can be perfectly met with nothing more than term life insurance, which is substantially cheaper than whole or universal life insurance. If an insured has already been paying into a whole or a universal life policy for years and is used to the higher premium amounts, this could work to their advantage if the transition to cheaper, term life insurance is made.

The difference between the whole/universal premium and the term premium can be banked in a savings account for the future, a rainy day, or for debt payoff. An important aspect to mention is that cheap term life insurance is not the one and only answer. If an insured is working to get out of debt, all the while setting up healthy systems that will take care of his current and future responsibilities, the Cheap Term Life Insurance is the best bet and the best start.

It would be possible and financially wise to revisit the set up once debt is paid off, businesses are operating smoothly, and dependents have moved out on their own; all of these scenarios are examples of times that might constitute a second look. A second look may warrant the switch to whole or universal life, when funds are available, or the term product may still be the resounding answer.