After my last post, @staystronggiver asked how you actually go about choosing a term life policy. She already has coverage through work but wants her own policy on top of it, and that's a smart instinct. Work coverage is a great perk, but leaning on it alone leaves gaps. It usually ends the day you leave the job, it is often capped at one or two times your salary, and you do not own or control it. Your own term policy is different. It stays with you no matter where you work, and it locks in your rate while you are young and healthy so you can size it to what your family needs. Most of the decision comes down to two questions, how much coverage and for how long. For the amount, add up what your family would need to replace your income for the years it matters, plus any debts like a mortgage, then subtract what you already have in savings and work coverage. For the length, match the term to the years people depend on you, usually until the mortgage is gone and the kids are grown. Ten, twenty, and thirty year terms are the common options. There's definitely more nuance than this, but these are the basics. Once you know the amount and term, a few policy features are worth paying for. Level term keeps your premium the same for the whole term instead of creeping up each year. Renewable means you can extend it later without a new medical exam, and convertible means you can switch it to permanent coverage down the road without requalifying. Those two matter because they protect you if your health changes, which is the one thing you cannot get back once it does. Term is close to a commodity, so once you know the amount, term, and features you want, you are mostly shopping on price. A broker who can quote several insurers at once makes that easy, and I would not pay extra for bells and whistles you do not need. The goal is enough coverage for the years that matter, not the biggest policy someone can sell you. @staystronggiver I hope that helps! let me know if you have any other questions about it! For everyone else, do you have your own coverage outside of work, or are you relying on the group plan?
2,968 views
17 Comments
Twenty-five And Invested@25andinvested · 4d
This is a great post. I was actually debating not having life insurance. My wife and I are not in a position anymore to need the replacement of another's income.
Sarah Giver@staystronggiver · 4d
Levi thank you so much for this post. This is exactly the information I needed to know. Now I am ready to shop around for policies because I know what to look for. I appreciate you taking the time to share your knowledge. My family and I thank you!
Freedom Fifty@niwradbogan · 4dEdited
I have a Term Life Policy at work but it is not enough to cover our mortgage balance so I took a 20 years term plan worth 700k for myself at premium of 45.99 cad a month. Seems like a good value of my money and gives me a peace of mind.
Max Penders@mjpenders · 4d
Thank you for these posts Levi, you make me feel so much more sane!
Clantosa @clantosa · 4d
Idk about you but I have a feeling a 30 year term life plan based on 100k a year so 3 million dollars is going to cost a lot of money.. I have term life that I got a decade ago for 20 years for only like 60k and that still cost me 25/m..
You must have an account to viewCreate an account for the full Blossom experience!
Join the conversation with 500,000+ other investors 💸
Create an account to get access to everything Blossom has to offer!
📊 Personalized algorithm based on your investing style, experience level and interests
📈 Powerful portfolio and dividend tracking tools
👀 See what top creators and others in the community are investing in
