If you live, you’re going to die. There’s no getting around that. Short of making peace with whomever you believe made you, there is perhaps nothing more important you can do before your death than making sure your loved ones will be taken care of if you die earlier than expected. And the best way to do that during your working years is with term life insurance.
Make no mistake; we hope you live a long and healthy life. If you buy term life insurance, the best case scenario is that the policy expires long before anyone can collect on it. Assuming your relatives like you, everyone can agree on that. But, if you do die before you’re ready to (and, let’s face it, who doesn’t?), having life insurance can help your family recover not only from your final expenses, but also from the loss of income that not having you around will incur.
Term insurance is by far the least expensive way to insure your family, with the exception of accidental death insurance. And accidental death insurance only pays out if you die in an accident. While it’s easy to reason that just about everyone dies on accident, the kinds of death this policy will pay for are extremely limited, making it a waste of money in most cases.
You could also opt for whole life insurance if you want to. On a positive note, it will definitely pay off when you die, regardless of age (well, technically, they generally just give you the check if you make it to 95 or 100 years old). Because the insurance companies know for sure they will be paying up, though, the death benefits are very small compared to a term policy of the same price. So, for most people, it isn’t practical to cover much more than final expenses with a whole life insurance policy.
Which leaves you with term. The premiums are smaller and the payout is bigger. Of course, if you outlive the policy, the insurance company gets to take all their marbles and go home, but at least you had the security of knowing that if something did happen to you, your family would have been taken care of financially.
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