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4 signs you need term life insurance

If you have dependents that rely on your income to get by, then life insurance is a must. Getty Images

Life insurance offers your loved ones a financial safety net. Should you pass away unexpectedly, it will provide them with a lump sum payment they can use to cover expenses, pay off debts or replace your income moving forward.

But which type of life insurance is right for your household? One popular option is term life insurance, which covers your loved ones for a set period of time — usually between 10 and 30 years. 

Term life insurance policies can be smart investments for many people, but there are some reliable signs to know if it's right for you.

If you're in the market for term life insurance then start by getting a free price quote so you know exactly what to expect.

4 signs you need term life insurance

Do you think you would benefit from taking out a term life insurance policy? Then see if any of these signs sound familiar.

You're on a tight budget

If you're looking to minimize your monthly premiums, then a term life insurance policy is your best bet. Since these policies only last for a short amount of time, they tend to be much more affordable than whole life insurance, which covers you for the rest of your life (for some people, that could be many decades). 

The average term life insurance cost for a 10-year, $250,000 policy ranges from just $12 to $74 per month, depending on age and gender, according to Progressive and Fidelity Life Association data. Men and older policyholders typically have the highest premiums. Keep in mind, though: These are just averages. Your exact premium will depend on your age, health, and the term life insurance length you choose, among other factors.

Start by getting a free price estimate so you know exactly what it would cost.

You only need it for a short time frame 

Term life insurance policies are designed to last for only a short period. For example, if you want to make sure your family has the funds to pay off your mortgage should you pass, you might get a policy equal to the years left on your loan. Many people also get enough term life insurance coverage to last until their children are 18 (and no longer in the home) or finished with college. 

You don't need an investment or saving component

Some types of life insurance have a cash value attached to them, which grows over time — sort of like a savings account. Other kinds allow you to invest your policy's cash value into index funds and other assets that grow your long-term wealth.

Term life insurance doesn't offer any of these benefits (another reason it tends to be cheaper than other policies), so if you don't need investment or savings help, it might be a good option to explore.

You're the primary breadwinner for your household

If you have dependents that rely on your income to get by, then life insurance is a must. A term life policy can ensure your loved ones have coverage through the remainder of your working years — or at least until you plan to retire.

Not sure how much term life insurance you would need? Start by getting a free price quote to see what you're eligible for.

Many options to choose from

Term life insurance is just one of the many life insurance policies you can choose from, but remember: Its coverage is limited. If you want lifelong protection, a whole life insurance policy is probably best. And if using your policy as an investment vehicle is something you'd like, a variable life insurance policy may be a better fit.

If you're still not sure which type of policy you should spend your hard-earned dollars on, talk to an independent insurance agent. They can walk you through the pros and cons of each type and help you shop around for the right term life insurance company to buy from. You can use the table below to start comparing providers and policies.

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