Term Life Insurance: When to Keep Paying

Term Life Insurance: When to Keep PayingThis episode delves into the question of when to continue paying for term life insurance. A listener with a $1.5 million policy wonders if its still worth the $200 monthly premium. Term life insurance is typically beneficial if you have several years left on a guaranteed level-premium term. The payout is usually tax-free.Term policies last between ten to thirty years and only pay out if you pass away during that period. If you outlive the term, you might be able to extend coverage, but premiums will likely increase significantly due to the conversion to annually renewable rates.The decision to continue your policy depends on factors like the remaining term length, potential financial hardship for your spouse, and your overall financial situation. Once the guaranteed term ends, premiums can skyrocket, as seen in a story about an 80-year-old who kept a $250,000 term policy after his level-premium period expired, paying over $220,000 in premiums.Its generally recommended to stop payments when you become financially independent, when your passing wouldnt cause significant financial stress for your spouse, or when the term expires and premiums rise sharply.The Daily News Now! — Every city. Every story. AI-powered. Hosted on Acast. See acast.com/privacy for more information.