When considering life insurance, many consumers believe term insurance is the best option. However, this is not always the case. In fact, that choice depends on your life circumstances.
It is true that term life insurance, which covers you for a specified amount of time, such as 10, 20 or 30 years, is almost always less expensive than other forms of permanent insurance.
The reason is that term insurance only pays out when you die (that is, if you die while the policy is in force). Permanent insurance, however, provides coverage for your entire life, assuming premiums are paid when due, and may also include a cash-value component.
To make the best decision, it is crucial that you understand just what you’re buying when you shop for term life insurance. Even an inexpensive policy, if not designed to meet your particular financial needs, can result in money down the drain.
Below are five of the most common, and costly, mistakes consumers make when buying life insurance. Avoid Costly Mistakes When Purchasing Life Insurance