Before you buy that new term life insurance policy, have you thought about how long it should last? Well, we have listed some factors you should consider that would help you select the perfect duration for your term life insurance.
You should take your mortgage into account when selecting a duration for your term life insurance. How many years will it take you to pay off your mortgage? If it’s a 30-year mortgage plan, there are term life insurance policies that exist for that period of years. The last thing you would want is for your term life insurance policy to expire just after 10-years. As it would mean that your loved ones will now be responsible for your mortgage repayments for the remaining 20-years.
Normally, your retirement marks the time when you stop earning income. Therefore, you should match the duration of your term life insurance to the estimated date you hope to retire. Once you retire, the amount you saved in your term life insurance policy should be enough for your family to maintain their standard of living.
If you have got kids, they should also be considered when you are selecting your term life insurance duration. How long will it take for your children to become independent? Nowadays, most parents provide life insurance coverage for their children well beyond their 18th birthday. If that is the course you want to take, ensure that the duration of your term life insurance policy matches the length of time you feel your kids will be independent. Also, if you will be paying for their college education, make sure that the term life insurance has enough funds to cover the increasing cost of college.