Universal Life Insurance

How Long Do You Need Life Insurance Coverage?

To me, the moment your asset will ensure a comfortable retirement, the moment you no longer need life insurance any more. Therefore, usually you only need life insurance for no more than 25-30 years.

Most would say they need the security of life insurance for their entire lives. Life insurance can help pay off a mortgage, fund a college education, take care of final expenses, offset the loss of the insured's income, and allow a family to continue its standard of living. Both term and permanent insurance can provide those benefits, but which one can do it most efficiently over the course of a lifetime? With a permanent product such as whole life, premiums are fixed — they can never be increased by the insurer — and your coverage can never be canceled provided premiums are paid when due. With term policies, your premiums are set for a predetermined period (one year, five years, etc.), then increase in subsequent years. With a premium increase at each renewal, the cumulative cost of term over the course of several decades may well bypass that of a comparable whole life plan. In addition, with some term policies, you may be required to submit evidence of continued good health with each renewal. This may put you in danger of being uninsurable when the term coverage is up for renewal.