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Many people delay the purchase of life insurance because it’s a commodity you can’t see. Unlike big screen TVs, fancy cars or designer clothes, life insurance is something you don’t get to see or use – only your survivors get to benefit from it. For this reason, when money is tight, people put this type of purchase on hold, or for many who do have policies, they let them default and cancel in order to have these funds available for things like rent or food. There are many types of policies that cater to a variety of needs. Some do little more than help pay for the funeral and burial plot. Others provide financial income for the surviving members so that they can have an appropriate period in which to grieve and try to come to terms with what has happened, and how to deal with their future. Husbands will typically choose a policy that provides for the wife and children in the event of his death. Term insurance is by far the least expensive and better investment for many reasons. These policies are purchased for a specific period of time, or term. The younger and healthier you are of course, the cheaper the premiums are. For instance, a healthy 30 year old male who does not smoke can usually purchase a 20 year policy for $250,000 worth of coverage, include his wife and children on the rider, and spend less than $150 a month. One reason the price is so affordable is because the company is betting on the fact that you won’t die within that 20 year time frame. Their risk is low. In reality, your chances of you or your covered family members being a victim of a fatal accident or a terminal illness are pretty slim. Now, take the same family at age 45. Time is creeping by and only now does the husband seriously consider his own mortality. Perhaps his own dad has just passed away and he sees what his mother is going through because his dad had no insurance or savings to leave behind. He then makes inquiries about term insurance policies with local companies and is a bit nervous about some of the quotes he is receiving. In this case, even a healthy 45 year old is now a higher risk for a 20 year term policy. His chances of dying during that 20 year period are significantly higher and his resulting premiums will reflect the fact that the insurer is accepting a higher level of risk in insuring him, and his family. He might choose the same coverage of $250,000 for his wife, but his children most probably at this point are close to adulthood and may not be allowed to be added to the policy. In some cases if they live at home and are full students, children up the age of 25 can be added onto their parents’ term policy. Because the average life expectancy has increased dramatically over the past few decades, many companies will write new coverage up till the age of 65 or 70. At this point, you might want to consider only a “burial” benefit of about $15,000 or so.

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