The Reason For Term Life Insurance: Income Replacement

Term life insurance helps cover your financial responsibilities if you die.
Quite simply, when you go, your income goes. And with it goes the regular influx of funds to pay your expenses. Think about all your expenses now and in the future: your mortgage, your children’s college education fund, your credit card debts, the family cars, and just the day-to-day cost of living for your spouse and children. Plus, think about the potential medical in the event of illness, and funeral expenses in the event of your death.

These are steep expenses. No doubt they would put a severe burden on most families. But there’s an excellent, affordable way to protect your family’s financial future if you die. It’s called “term life insurance.” And essentially, its whole purpose is to replace all, or at least part, of your income if you die.

Everybody knows—especially insurance agents—that no one wants to talk about dying. Don’t worry—buying term life insurance is not a long, painful process. Just the opposite—it’s fast, easy, and free. You can compare options right online. And in most cases, after you compare rates, you can even buy a high-quality, affordable term life insurance coverage policy through a website in a matter of minutes—without a medical exam! But if needed, insurance agents—yes, live people!—can usually help you over the phone if you have any questions. The goal is to make sure you choose the best life insurance possible—best for your family’s future and best for your family’s budget.

Why term life instead of some other kind of insurance, such as permanent life insurance, for income replacement? Term life insurance is far less expensive and far easier to get. But it is important to be aware of how it differs from permanent life insurance.

Different types of permanent coverage include whole life, universal life, and variable universal life. With whole life insurance, for example, your beneficiaries—your spouse or children or any individual(s) you designate—receive the value of your insurance when you die. What they receive is the face value of your policy. Even though the cash value of your whole life insurance policy builds with every payment you make and your policy also builds value as your payments collect interest, the only way to receive the cash value if your family needs it is to “cash out” out the policy (at a fraction of its face value) while you are still living; otherwise, if your policy payments are up to date, your family receives your policy’s face value when you die. The insurance company is betting that they will earn more money from investing the premiums you pay over your lifetime than they will pay in the face value of your policy.

They base that bet on your health and estimated length of your life as determined by a thorough medical examination. With term life insurance, your beneficiaries receive no payout if you live past your policy’s term. Think of it like car insurance—if you’re in an accident, the insurance covers medical care, car repair or replacement, and so on while your policy is in effect. Same with term life insurance—if something happens to you, your policy provides your family with money when they need it most. But if nothing happens to you, the insurance company simply keeps the money you paid—it’s the price you pay for protection and peace of mind.

But—here’s the good part—the price of term life insurance is lower than permanent life insurance. Much, much lower! The low cost of term life insurance and the ability to get it quickly and easily…even without a medical exam—these are the reasons why many insurance agents advise that you “buy term and invest the rest”—buy term life insurance for the affordable protection it offers. Then, to make the rest of your money grow, invest in other forms of insurance, or invest in stocks, real estate, or other risky but potentially profitable investments…but only—only—after you have protected your family with term life insurance.

Getting the security of income replacement with a term life insurance policy is very simple. In most cases, you can even get life insurance without a medical examination. Visit Or call 1-800-939-0710.