Who Needs Term Life Insurance?

-- By Pushpa Sathish, Staff Writer

Term life insurance may not be the most sensible insurance option, especially for those who are looking at insurance as an investment. But there are situations where term life will work out better than whole life insurance policies which carry a much higher premium.

• Young couples who have a considerable amount of debt, and who absolutely need insurance, will find a term life insurance policy with a large benefit within their means, and able to meet their needs.
• Families that need insurance cover for a short period, under ten years or so, can opt for term life options. In this period, children live at home, and their needs have to be met. Once the fledglings leave the nest, the financial cushion can be reduced. Term life insurance policies offer the best short-term financial advantages.
• Couples approaching retirement with college-going kids and a mortgage will also find term life insurance policies that cover both attractive.

The best part of short-term term life insurance options is that these policies are convertible to whole life on cancellation. So once the family finances are doing reasonably well, and the household and academic expenses are considerably reduced, you can change your policy to the whole life option. But make sure such a conversion is possible when you first take out the term life policy.