Does it make financial sense to consider term life insurance in your 30s?

No matter what type of life insurance policy you choose, your goal is to make sure that your loved ones will be able to anticipate unforeseen expenses and live comfortably without the income you currently provide. Also known as level premium insurance, term life insurance provides a fixed death benefit to your beneficiaries in the event you pass away within the term of the policy. If the term expires, you receive no money in return for the premium you paid during the term, which can be maximum thirty years.

Of all the life insurance policies, term life insurance makes financial sense if you’re looking for financial protection during a specified term at the lowest premium. Whether you’re looking for a 30-year term policy while paying off your mortgage, for a 20-year term policy to fund your child’s education or for a 10-year term policy to cover for your expenses until you hit retirement, term life insurance can offer you the peace of mind that comes with the certainty that your dependents won’t be left with nothing if you pass away. In the event you pass away within the term, your dependents will receive immediate death benefit as described in your contract.

Unlike other investment products, term life insurance does not build any cash value that the policyholder can recapture or borrow against, but it is purchased to cover short-term needs. But, term policies offer additional benefits including coverage against huge medical bills, coverage of hospitalization and treatment, lower medical costs, lower costs to specialized doctors and better access to routine medical checkups and health care.

One big dilemma that most people face when it comes to term life insurance is when is the right time to buy a term policy. Here are some basic guidelines for considering term life insurance in your 30s.

1. The rule of age
The younger you are, the better financial decisions you make. In your 30s you have less financial obligations and more time ahead to allocate your money properly. In your 60s you have family, mortgages, school loans and medical bills. By purchasing term life insurance in your 30s, you are able to anticipate unforeseen expenses and secure the financial future of your dependents. Moreover, over the term of your policy you will be able to lower your premium as you will have gathered liquid assets to draw money from to cover for unforeseen expenses. Also, in general, the younger you are, the lower the premium. So, why not taking advantage of that as well?

2. The rule of how much
Typically, choosing a term life insurance policy is a decision based on your current budget and individual lifestyle. For instance, if you are a single parent with a child, age six, and you want to anticipate college expenses, you may decide to buy a 20-year term policy. If college expenses would cost you £60,000 per year, a death benefit of £240,000 is adequate to fund your child’s college education in case you pass away within the 20 years. On the other hand, if you are in your 50s, you may consider a 10-year term policy to cover for the years left to retirement and a death benefit for your spouse.

In general, two important factors that need to be taken into account when considering term insurance is protection and cost. Once the term expires, the policy is no longer in force. This means that your beneficiaries will collect the death benefit only if you pass away within the term. Otherwise, the premiums have been paid in vain. The cost of a term insurance policy is the lowest compared to other insurance policies, but you should always have in mind that the premium is a product of age, health condition, and length of term. This justifies why the earlier you buy term life insurance, the better.

Thomas Sterlin is an independent author, whose review articles aim to help consumers make an educated choice of an insurance plan. Read his latest overviews of Bright Grey life insurance and Friends Life insurance products.


The benefits of outsourcing your landlord admin

Ask yourself why you become a landlord. There are a few reasons that you would want to but I would put large amounts of money on you not answering one of the following:

1)                  To do lots and lots of paperwork

2)                  To find friendly tenants to hang out with

3)                  To destroy your property slowly over time

4)                  To enjoy being in the front lines of the fluctuating property market

That first one in particular is never going to be anyone’s reason to do anything, with the exception of maybe a professional secretary or personal assistant, and even then, they probably didn’t get into that gig specifically for that factor.

It’s much more likely that you became a landlord to either play the property market as an investor or that you had a spare property kicking around that you didn’t really want to sell. For this reason, you do not want to find yourself bogged down in paperwork and general administration.

Even if you only rent out one property, there will be some moments where keeping your tenants happy and the venture ticking over becomes a demanding job. Keeping on top of paperwork is one thing with important aspects like your landlord-insurance or your tenancy agreements often becoming overwhelming and once you start expanding with multiple properties, the workload in terms of satisfying tenant demands understandably also begins to scale rapidly.

Delegation for fun and profit

If you are renting out multiple properties, you have stopped becoming a casual landlord and are moving closer towards a more traditional business model and just like any traditional business model, delegating more routine yet time consuming tasks is a must.

If you offload all of the grunt work that you find yourself increasingly engaged in to someone, then you are going to find whatever you pay them to do this a very worthwhile investment as it frees you up to take command of the bigger picture.

Losing the tedious admin work leaves you with the broad strokes research of looking for new properties to buy, deciding which properties you might consider selling or even investigating other investment ventures entirely. If you are a landlord of multiple properties, it is often a safe bet to say that your talents are not best used by time consuming administration.

Sense checking

Obviously it is important to make sure that your operation can support administrative staff before putting out an ad for an assistant. It might be that a more cost effective route would be to investigate going through a lettings agent if you don’t mind surrendering some of the control and paying a regular fee to them.

You want to be making money from your investment and not wasting your life chasing around fiddly paperwork issues when you could be looking into new ways to make money.

YOUR Insurance specialises in providing landlord-insurance-for-landlords of single and multiple properties.