A Whole Life Insurance Policy is best if you want to leave something behind for your kids or grandkids. However, it is more costly than Term Life insurance. If you just want to insure short-term financial responsibilities for five to twenty years, then a Term Life policy would be appropriate. For example, if paying off your mortgage takes 20 years, then take out a 20-year term policy for the limit of your mortgage. Or, if you have young children who would become independent after 20 years, again, a 20-year term life policy would work out.
This type of life insurance gives you coverage for a set period, such as the span of 10 years to pay off a business loan. You can typically buy Term Life Insurance for a period of 5, 10, 15 or 20 years.
With Term Life Insurance, the longer the term, the higher the monthly premium. When the policy expires,you would have options to renew, but at rates that may have increased from what they previously were.
Term Life Insurance is not just used for mortgages. There are other short-term uses of a term life policy. You may want insurance while your kids are young, until they grow up and don’t depend on your earnings. Of course, if you want to leave something behind for your adult kids or for your grandkids, then you should get a Whole Life Insurance policy or a mix of both.