How Much Term Life Insurance Do We Need and What Time Period Should We Buy?

Dave Ramsey and his team recommend term life insurance for those whose families rely on their income or have debts that can’t be covered by existing assets. Otherwise, he believes your money is better used elsewhere. Following the advice of Ramsey Solutions, Zander Insurance offers only guaranteed level term life plans. The general recommendation is 15- or 20-year terms, giving you time to pay off debt and build savings so you no longer need life insurance. Younger individuals just starting their families may need a longer term, but as you age, the cost difference between term lengths increases, making shorter terms more cost-effective.

For coverage, it is suggested that you have 10-12 times your income to help your family maintain financial stability. You can also “ladder” policies, purchasing multiple plans with different term lengths to match your financial obligations. It’s important to choose a term long enough to avoid facing much higher costs when it expires. If the price difference is small, opting for a slightly longer term provides added security.

If 10-12 times your income isn’t affordable, the Ramsey team suggests lowering the coverage amount to something manageable while working toward a better financial position. Another option is a 10-year term with higher coverage, depending on your debt and savings. If you’re unsure which approach is best, call us at 1-800-356-4282, or visit our website to compare quotes instantly.