Ask someone why they’re investing for retirement, and they’ll usually give two answers: to cover post-retirement living expenses and to help provide for a spouse after they’re gone.

But what if “gone” comes far earlier than you expect? Term life insurance is a great – but often misunderstood – safety net. 

Term life insurance is a policy with a fixed end date – usually 10, 20 or 30 years out, depending on when you expect the kids to be out of the house and your nest egg to be sufficient. It is meant to ensure your family can cover funeral expenses, debt and other needs after you’re deceased.

I bought a term life insurance policy after my children were born, and think it’s a smart move for most families. Those wanting lifelong coverage may find permanent life insurance more beneficial.

Yet industry observers have found many folks don’t investigate life insurance options. TermLife2Go, which seeks to help consumers navigate this complex industry, found most people assume life insurance costs three times more than it really does.

Why? Insurance companies can’t provide a quote until you answer a slew of questions about your health, habits and lifestyle. It’s the verbal equivalent of a colonoscopy. Many fear filling out reams of paperwork or taking medical exams, only to find out they can’t afford the insurance. It’s a vicious cycle. 

Knowing how companies price life insurance helps you cut through that fog. TermLife2Go has a great online resource  showing how insurance rates boil down to six factors: age, health, type and term, desired payout, gender and lifestyle. 

Age is simple: The younger you are, the cheaper your coverage. Rates start jumping once you hit 40 and rise as you age, with availability more limited the older you get.


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