Reader’s Question:

It seems that term life insurance policies are pretty cheap (I’ve talked to several life insurance agents here in Arizona about their rates) I do see myself wanting life insurance for as long as I’m alive, would it be better to buy 10-year term life policies and just renew as needed afterwards?

Dexter

Phoenix, AZ

You are right, term life insurance policies are quite cheap. But is this the kind of policy that is right for you?

With regards to your question, if it would be better to take advantage of low term insurance premiums and just renew afterwards, might be just fine in the short-run (like for the next ten years or so) but how about for the long haul? Since it seems that you prefer to have life insurance coverage for the rest of your life, let me help you avoid a common pitfall about term life insurance.

Term life insurance gets more expensive as you age, you may have been able to secure a good rate when you were younger (and healthier) but there is no guarantee you will get the same low rates again. You may have develop some illness or a medical condition making you un-insurable. You may already be too old by the time your policy expires, making the cost of renewing your term life prohibitively expensive.

Simply put it, you will spend a lot more in the long-run if you keep on renewing a term life policy. You are better off with a whole life policy that may be more expensive, initially, but will slowly become more affordable over time and would tuck away part of your money to grow and be available future needs. Or at least consider a guaranteed renewable term life policy that would allow you to go whole life in the future.

Tags: cheap term life insurance, term life, life insurance, advise