1) I’m big on stability, so I prefer policies that have a guaranteed level premium for the term of the policy. Annual renewable term policies can raise the premium every year, until the policy is surrendered. If you are only going to keep the policy for a short while, annual renewable term may be cheaper, but experts warn that in the long run it will probably be more costly.

2) Also, I prefer term insurance that guarantees level term benefits. This means that if you buy a 20 year, $100,000 policy, your beneficiary will get the full $100,000 whether you die in year 2, 10, 18, or whenever.  Decreasing term is another type of policy that will pay a lower benefit the closer it is to the end of the term. Sometimes sold by banks as mortgage protection, decreasing term benefit coverage is a big profit maker for the banks, but many experts don’t believe it’s very good for consumers.    

 3) Guaranteed renewable can help safeguard an uncertain future. Of course the goal is to get to the point where you don’t need insurance coverage at some point. And, besides, if you still do need coverage at the end of your term—you can just buy some more insurance at that time, right? Not necessarily.  It’s possible that you may still need insurance at the end of your term, and it’s also possible that health conditions could make it impossible to get decent coverage. What to do? You might wish to consider buying the original policy with the guaranteed renewal option.  This may make it possible to get more coverage at a later date. However, be aware that future rates can be prohibitively expensive especially if you health declines. Get detailed future rate information before you buy.

What About Mama?

In families where the mother stays at home to raise and nurture the children, sometimes you hear a thoughtless husband say, “Oh we don’t need life insurance on her because we don’t depend on her income.” 

Rather than argue the point, I think the best thing to do is to ask the question: “What does mama do around here?” After he has listed everything from counseling to car pooling, from shopping to studying, from bookkeeping to baking, from correcting to cleaning—then you might ask, “So, what would it cost to hire a professional to come in and do all of those jobs?” Finally, with an amount agreed on, multiply that times the number of years of childhood still ahead—and, there you have a ballpark figure of the amount of insurance that you need to replace Mama!

The Bottom Line

As the title of this article indicates, I think of life insurance as love insurance.  One of the most loving things a family bread winner can do is protect his family. One of the foundational building blocks to achieving this goal is to care enough to make sure that if you die, grief for your lose won’t be compounded by a financial catastrophe. 

Steve Diggs presents the No Debt No Sweat! Christian Money Management Seminar at churches and other venues nationwide. Visit Steve on the Web at www.stevediggs.com or call 615-834-3063.  The author of several books, today Steve serves as a minister for the Antioch Church of Christ in Nashville.  For 25 years he was President of the Franklin Group, Inc.  Steve and Bonnie have four children whom they have home schooled.  The family lives in Brentwood, Tennessee.