Is the cost of term life insurance practical in the long run?
Dion
Phoenix AZ
A term life insurance is typically a person’s answer to short term life insurance needs. The cost of term life insurance may be inexpensive to buy at 30 years old but it gets more expensive as you grown older. More, the age difference could make buying a permanent insurance difficult.
It is like this. Say you’re 30 year’s old now and you have applied for a term life for 30 years. The average offer from various insurers would be a little over $200, which is about $18 a month. It does not seem like a lot of money to pay for the next twenty years, right? Now, let us compare that with a 69 year old person who would like to renew his insurance this year. That person will pay the cost of a term life insurance between $800 to $3000 in annual premiums. The increase, as you can see, is very steep. If the 69-year old person has opted to buy a permanent life insurance when he was say, 35, that is payable in 10 years, he would not have worried about getting a new one at his age. He could have enjoyed the rest of his golden years with the assurance that his dependents or his loved ones will get the insurance money once he dies.
The cost of term life insurance is made low not because insurers have wanted people to buy them indefinitely. The term insurance has been designed to supplement an existing permanent plan. Or, it could be purchased to cover mortgage costs in the event that the insured dies without completing the mortgage payments. Over the years though, the market for term life has evolved with people preferring them over the permanent plan because of cost.
So, if you have the money to purchase a permanent plan, then, I say go for it!