Yes, term life insurance rates are generally much lower than Universal Life and Whole Life Insurance since it provides temporary coverage and does not have a cash value component, but there are other reasons to consider purchasing it.

Mortgage Protection

Mortgage protection insurance is a type of insurance that pays off a borrower’s mortgage in the event of their death. This type of insurance is designed to help protect families from losing their homes in the event of a sudden financial setback like losing a breadwinner’s income. The policy pays a benefit to the beneficiary to cover the remaining mortgage balance, which can help relieve the financial burden on the borrower’s family and ensure that they are able to keep their home. 

Tax-Free Death Benefit

In almost every case, a life insurance death benefit is paid to the beneficiary(s) tax-free unless the death benefit is paid to the insured’s estate. Think about the tax liability your beneficiary would have if you were to die with a million-dollar life insurance policy and that the IRS considers personal income.

Income Replacement

When you purchase a term life insurance policy that is sufficient to replace your income, you will provide peace of mind to surviving loved ones knowing that there will be sufficient funds to pay one or more of the following:

• Balance of the mortgage on the family home
• Eliminate the balance of any personal loans, auto loans, and credit card balances.
• Provide the money needed for the education costs of surviving children.
• Continue funding the retirement fund for a spouse or partner.
• Pay the monthly living expenses of your surviving loved ones for several years.

Leave a Financial Legacy

Many individuals choose term life insurance to provide a financial legacy to a favorite charity or church.