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Q: How Many Years Should I Purchase Term Life Insurance for 10,15,20 or 30 years?

2011 November 20

Dave Ramsey only recommends guaranteed level term life plans and tends to lean toward the 15 or 20 year plans.  He feels that you can accomplish very significant financial progress over 15 to 20 years so that you greatly reduce and eventually eliminate the need for life insurance.  At younger ages if you are planning a family or have younger children, then considering a 30 year plan is ok since it allows more time as long as the additional cost does not strain your budget too much.  However, as you get older the cost difference of the 30 year plan increases and does not represent as strong a value.  As you get older, a 10 year plan may work if you have eliminated debt but are till working on growing your savings to make sure a surviving spouses financial lifestyle will not change.

Additionally, Dave typically recommends that families carry an amount of life insurance equal to 8 to 10 times their income.  This level of protection will generally allow for a continuation of the financial lifestyle for the remaining family members and allow debt related issues along with education funding, emergency needs, and final expenses to be addressed. You can adjust the multiples based on your personal situation and reduce or increase based on those specifics.  You can also consider “laddering” policies which means purchasing multiple policies to address the different time frames of your personal situation. However, the savings here is usually limited unless you are older or looking at high valued polices. Zander Insurance only offers level term life plans. You can compare rates online at Zander Insurance or call Zander Insurance at 800-356-4282 for personal assistance.

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