Most people are familiar with whole life insurance and that it can help to leave a financial legacy for beneficiaries. Experienced Financial Advisor, Donald Dirren, says there is an affordable alternative to whole life that is affordable and protects family assets and lifestyles.

That alternative is term life insurance. As the name suggests, term life insurance is in effect for a specific period of time or a “term.” Once that time period has expired, so does the life insurance policy.

1. Protect Family Against Sudden Loss of Income

Don Dirren says term life will produce a significant payout that is based on the amount of coverage that you obtained. If you should pass on while the term life policy is in effect, the insurer will pay the insured amount to your chosen beneficiaries.

That payout can help to protect your family’s assets and prevent a significant change in their standard of living if you are the primary source of income for your family.

2. Pay for Medical Bills and Funeral Expenses

Term life is especially useful for paying off short-term financial obligations if the insured person should die while the policy is in effect. Those short-term obligations might include medical bills and funeral expenses that other insurance policies do not cover.

3. Mortgage Protection for Your Home and Properties

Many people buy homes and other properties with mortgages that require payments over many years. Donald Dirren notes term life is a terrific financial tool for protecting those financial obligations and ensuring those debts are paid if you die unexpectedly. You can buy a decreasing term life policy whose coverage amount and cost decrease as your debt gradually becomes less and less.

4. Ensure Children’s College Tuition and Costs

If you have children who are enrolled in college or plan to enroll, term life can ensure the tuition is paid if you are no longer around. Term life is an affordable way to ensure your children’s educational future.

5. Protect Family Assets and Businesses

Term life helps to ensure your family’s assets remain in the family upon your passing. Instead of forcing a sale of assets to raise funds, your family can hold onto them and continue to benefit from owning them.

Why Term Life Is Preferable to Whole Life Products

Term life does not come with a guaranteed payout like whole life insurance. Instead, it exists for as long as you need to protect certain financial obligations, like a home mortgage, protecting business assets, or ensuring your children’s college tuition is paid if you should pass on unexpectedly.

Term life also is much easier to obtain than whole life insurance because the policyholder does not have to undergo medical examinations. Because there is no guaranteed payout, insurers are more willing to underwrite coverage and charge less. That makes term life insurance a very smart investment for protecting financial obligations that eventually will not exist after a period of time, such as a home mortgage.