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Term insurance: What young families need to know
At this point in your life, you may already feel like your expenses are tight, but investing in life insurance can make a big difference to financial security. Here are 6 key points to keep in mind when considering a term life insurance policy.
Insurance is an important part of your financial plan
Proper insurance coverage for disability, life, umbrella liability, and long-term care is important—and your workplace benefit may not be enough to cover your needs. Learn how these 4 different types of insurance could help protect you down the road.
Frequently asked questions
To help you quickly find the answers you need, we’ve curated responses for the questions we hear most often.
Is term life insurance right for me?
Term life insurance covers individuals for a specific amount of time, for a predetermined dollar amount. This coverage serves as a safety net for a period of years and can provide financial security to those you love if something happens to you. Most people start with enough coverage to pay off existing debts which could include a mortgage, student loans, credit card debt, etc. And for people with dependents, term life insurance provides coverage for families to ensure continuity of lifestyle and financial goals. Term life insurance is available to those 18 years and older, US citizens, and permanent residents of the United States.
How long will my term life policy last?
Fidelity offers term life insurance in 10-, 15-, or 20-year increments. That’s because your coverage needs are likely to change as your expenses and financial responsibilities evolve. This tool can help assess your need and provide an estimate of cost.
Can I change my coverage amount in the future?
Yes. If you want to decrease your coverage amount, contact Fidelity at any time during the life of the policy. If you want to increase the coverage amount, a new application is required.
What happens at the end of my coverage period?
Term life insurance is designed to cover you for a set period or term—you are buying protection for the amount of time that you most need it. If you buy a 10-year term policy, for example, you pay a fixed amount for that period of time and at the end of the 10-year term, you can terminate or lapse your policy, meaning you stop paying premiums and you are no longer covered in the event of the unexpected. If you chose to continue your policy, your premium would increase significantly.
How much term life coverage do I need?
The amount of coverage you get should reflect how much money you'd like your beneficiaries to receive in the event something happens to you. You can start with your family's day-to-day needs—the entire amount of money it takes to run your household each month or by estimating how much your beneficiaries may need to pay off debts—student loans, a mortgage, credit cards, etc. If you have a spouse/partner, it's also important to have coverage for both people, no matter how much each person earns. You might need to cover costs such as additional caretaking of children or time off to settle the estate. You can estimate your needs and see a quote here.
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