Why my fiancé and I chose term life insurance over permanent

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When I got engaged, my fiancé and I had a lot of conversations about money for the first time. We started with the basics of combining our finances and what that would look like that for us. Then, we moved on to questions like how to pay joint taxes and what insurances to buy. 

Life insurance was something I was sure I wanted both of us to have. My parents had it, and I felt it was an important insurance to buy early on, even before getting married and starting a family. It laid the foundation and structure for the future. Plus, the earlier we got life insurance, the less expensive the monthly premium would be, since your premium is based on a handful of factors including your age. 

From my fiancé’s perspective, this wasn’t something he’d given much thought to before — and he wasn’t exactly eager to sign up. In fact, the first money argument we had was about getting life insurance.

I pleaded my case, arguing that it will slide down our to-do list if we don’t do it now, and reminding him that once we get married, we’ll share each other’s debts. Having a life insurance policy in place means there would be money to cover those debts if one of us died suddenly and wasn’t around to help pay it off.

After going back and forth, we decided to look into our options. That’s when the debate over the kind of life insurance we both wanted to get took center stage. 

Why I wanted permanent life insurance 

I wanted to get permanent life insurance, which is a term for life insurance that doesn’t expire (as opposed to term life insurance that does have an expiration date). I found this to be the most secure option, since unlike term insurance, permanent life insurance lasts the lifetime of the insured person. I figured, why think about doing this again? Why not just get a policy that will last forever and not have an expiration date? It would allow us to do this and forget about it (hopefully) for many years to come.

My fiancé argued the downside of a permanent life insurance policy, which is the cost. They are known to be way more expensive than term coverage. For me, the cost for a $200,000 coverage amount and a permanent term was $178 a month, according to a quote from Policygenius.

In full disclosure, that was more than I expected, and while I didn’t want to lose the argument, it opened my eyes to how much this would cost us so early in our lives. It made me agree to listen to my fiancé’s argument. 

Why he wanted term life insurance

My fiancé, who didn’t at first want life insurance at all, eventually argued that starting off with a term policy was the right way to go. At our age (both 32) we could get a policy that was less expensive if we started now and picked a term of 20 to 25 years. Even though we’d likely want it for longer, with term policies you sometimes have the option of converting to permanent life insurance when your term is up or renegotiating your rate and extending the term. 

Since term life insurance has a lower premium, my fiancé argued that we could save what we would have paid for a permanent policy up in the meantime for emergency funds and other types of savings accounts so we could stay prepared for what life handed us in the future. 

The cost for a $200,000 coverage amount and a 20-year term was $16 a month, according to a quote from Policygenius.

This was quite a huge difference and ultimately what we decided to pursue. We’re currently in the process of picking an insurance company and a policy but we have agreed to do a term policy and worry about next steps once that term comes due 20 years from now. 

With so much unknown and my passion for starting this life insurance process early, ultimately starting off with a lower monthly cost will allow us to make more smart financial decisions as we build our life together.