Term Life Insurance
Term is the best life insurance you can buy. Term insurance is purchased for a specific period of time and is the cheapest type of life insurance.
The most commonly available terms are 1, 5, 10, 15, 20, 25, and 30 years. And unlike permanent insurance, term insurance has no savings associated with the policy.
Since you are paying purely for life insurance (not life insurance and savings), you can generally buy a lot of insurance for relatively little money compared to permanent life insurance. This is a good thing because most people are either underinsured or they don’t have any life insurance at all because of cost. By being more affordable, term insurance helps you obtain enough protection to take care of your family should something unexpected happen.
Invest the difference
With the money you save buying term insurance instead of permanent insurance you can also start your own separate savings or investment plan. By keeping your investments separate from your insurance, you can access your own money without having to borrow it or cancel your life insurance coverage. You’ll also have full control over how your money is invested instead of being limited to what the insurance company offers.
This is approach is called buying term and investing the difference. If you invest long enough, you will build up enough
savings to become self-insured. Being self-insured means having enough savings and investments to take care of your family if you pass away. Another benefit to this approach is that once you have enough savings to take care of your family should something happen, you don’t need life insurance anymore. You can cancel your policy and save yourself from having to pay those life insurance premiums for the rest of your life.
