In an earlier piece, I discussed the basics of life insurance. To put it simply, life insurance ensures us that our families will not suffer economic hardship if something happens to us. It simply entails figuring out the full replacement value of your income. While the information available from insurance companies can seem confusing, in reality, the decision can be very simple.
Term insurance provides a stated death benefit for a certain period of time.
After ten years, the policy ends, so you need to get new coverage-which will invariably be more expensive, since we all age and become bigger risks for insurance companies. A one-year renewable term insurance covers you for one year, and its renewal is guaranteed as long as the premium is paid in full. The premium increases each year as you get older. Depending on the state you live in, the coverage can continue until you reach age 70 or 80. Term insurance is initially quite inexpensive relative to the potential benefit.