How Term Life Insurance Gave Us a Financial Security Blanket


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I didn’t think I needed a life insurance policy when I entered the government workforce at 21. After all, why would I pay for someone else’s windfall if I died?

A few years later, my husband and I “officially” became adults when we purchased term life insurance policies. Here is how we decided that term life insurance was right for our long-term financial needs.

Why Do I Need Life Insurance?

My views as a new college graduate weren’t that uncommon. Less than half of American households had individual life insurance in 2013 according to LIMRA studies. Half the population believes it needs more insurance, but consumers shy away from purchasing it due to the expense and budgetary constraints.

Covering household expenses became more important when my husband and I married. The “What If” questions we tackled around that time frame led us to join the 41 percent of consumers who shop for life insurance due to adding a dependent.

What is Term Life Insurance?

CNN Money editors coin term life insurance as the “best choice for almost anyone.”

Term policies provide coverage for varying time periods (usually up to 30 years) and replace lost income from the deceased policy holder upon death. Most consumers select terms that cover the length of expenses like a mortgage or child’s college education. Term premiums usually remain fixed for the duration of the policy, and beneficiaries usually receive one lump sum if the policy holder dies.

Financial gurus Suze Orman and Dave Ramsey recommend term policies over whole and universal life insurance policies; Orman and Ramsey warn that using these permanent policies as cash savings wastes potential dollars for more profitable investments.

How do I purchase Term Life Insurance?

Applying for a term life insurance policy was painless. Once we selected a modest term life policy, we completed lengthy health information questionnaires and got routine physicals. A few weeks later, we signed our contracts.

The application process provided an added benefit; it required us to face our earnings, debt, and health concerns and develop long-term goals for dealing with obstacles together.

The Bottom Line

Term life insurance has provided us with an affordable financial security blanket. That said, consult a financial professional to tackle your family’s unique insurance needs.