Key Person Insurance also known as Key Man Insurance is a life insurance policy on an employee that is deemed as vital to the ongoing success of a business. If that employee dies, the business receives the death benefit.

Basic Partnership Example:

Jenny and Audrey are business partners at an internet startup. Both are vital to the ongoing success of the business. If for any reason one of them were to die, the business would suffer dramatically in the short-term. To protect against this, Jenny takes out an insurance policy on Audrey and names herself as the beneficiary. Likewise, Audrey takes out an insurance policy on Jenny and names herself as the beneficiary. In this way, the business has protection.

Corporate Example:

The owner of a software company wants to insure the business against the potential death of his most skilled programmer and also against the potential death of his most skilled salesman. Both employees are instrumental to the success of the business. The owner makes sure that life insurance policies are taken out on both of these important employees and names the corporation as the beneficiary of these policies.

Term Life Insurance as Key Person Insurance

The type of insurance that is a great fit as ‘key person insurance’ is term insurance. There are three reasons for this.

1) You can set a length of time for how long you want the policy to last.

2) Term insurance is relatively inexpensive compared to Whole Life Insurance.

3) The policy can be dropped for any reason at any time. For instance, if the key man leaves the company or the need for the policy simply no longer exists, the business can simply stop paying the premiums and effectively drop the policy.

Customized Structure

Key person insurance is beneficial to many different types of businesses including but not limited to partnerships, corporations, family businesses, law firms, small businesses, sole proprietorships, etc. The policy can be customized in terms of the length of time the policy lasts and the amount of death benefit provided, so as to fit the needs of each business.

Free Quotes and Personalized Service

At Secure Term Insurance we are insurance brokers offering free quotes and personalized service with step by step guidance throughout the application process, underwriting process, and any assistance you may need thereafter. Contact us today and get the coverage that is right for you!

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Term Insurance Rates for a 30 Year Old

A healthy 30 year old male can get a 20 year term policy with a death benefit of $1,000,000 from Banner Life for just $422.50 a year. This is approximately $35 a month and approximately $1.15 a day. That is less than a Caffè Latte per day.

Another option for a healthy 30 year old male is a 20 year term policy with a death benefit of $1,000,000 from Principal National Life Insurance Company for $455.00 a year. This is approximately $38 a month.

Term Insurance Rates Analysis:

The quotes above are both competitively priced. Both of the companies have A+ financial ratings from A.M. Best ratings agency. In purchasing a life insurance policy, pricing and financial strength are both factors to consider. You will want to buy a policy from a company that is most certainly going to be around for many years to come. In this scenario, the Banner Life policy is slightly less expensive. However, Principal has an accelerated underwriting program that allows the possibility of waiving the paramedical exam, which is almost always an underwriting requirement. For this reason, the 30 year old may consider the Principal policy even though it is slightly more expensive. This example demonstrates the importance of having a broker that is familiar with the insurance carriers in the industry and their underwriting guidelines.

A healthy 30 year old female can get a 20 year term policy with a death benefit of $1,000,000 from Banner Life for $347.36 per year. This is roughly $29 a month.

Another option for a 30 year old female is a 20 year term policy with a death benefit of $1,000,000 from Transamerica Life Insurance Co. for $350 per year. This is roughly $29 a month as well.

Term Insurance Rates Analysis:

The above quotes are both competitively priced and from companies that have high financial ratings. As you can see, these quotes are less than the quotes for the 30 year old male. This is because women have a greater life expectancy than men.

Term Insurance Rates for a 40 Year Old

A healthy 40 year old male can get a 20 year term policy with a death benefit of $1,000,000 from John Hancock for $643.00 a year.

Another option for a healthy 40 year old male is a 20 year term policy with a death benefit of $1,000,000 from MetLife for $649.00 a year.

A healthy 40 year old female can get a 20 year term policy with a death benefit of $1,000,000 from MetLife for $519.00 a year.

Another option for a healthy 40 year old female is a 20 year term policy with a death benefit of $1,000,000 from Banner Life for $549.98 a year.

Term Insurance Rates Analysis:

It is important to note that the quotes above are from companies with A+ financial ratings from A.M. Best ratings agency. Also, notice that MetLife is the least expensive option for the 40 year old female but not the least expensive option for the 40 year old male. Sometimes if a married couple are both seeking life insurance, they might purchase from different companies in order to maximize savings. Insurance carrier prices all vary based on age, gender, health, etc. An insurance carrier might be priced the best for a certain age group and gender and have relatively higher prices for another age group and gender. This is yet another reason that it is important to go to a broker when looking for term life insurance. Brokers can compare prices from the various insurance carriers and find the best pricing. Also, some insurance carriers have better pricing for whole life insurance and much worse pricing for term insurance. So again, there is an advantage to going to a broker, as it is important to compare prices to get the best rate.

Term Insurance Rates for a 50 Year Old

A healthy 50 year old male can get a 20 year term policy with a death benefit of $1,000,000 from Lincoln National Life Insurance Company for $1,688 per year.

Another option for a healthy 50 year old male is a 20 year term policy with a death benefit of $1,000,000 from John Hancock for $1,710 per year.

A healthy 50 year old female can get a 20 year term policy with a death benefit of $1,000,000 from Lincoln National Life Insurance Company for $1,244 per year.

Another option for a healthy 50 year old female is a 20 year term policy with a death benefit of $1,000,000 from Banner Life $1,249.99 per year.

Term Insurance Rates Analysis:

The above quotes are from companies with A+ financial ratings from A.M. Best ratings agency. Notice that for both a 50 year old male and 50 year old female, Lincoln National Life Insurance Company had the best pricing. However, in the 40 and 30 year old age groups, Lincoln National Life Insurance Company was not priced that low. No insurance carrier has the best term insurance rates across the board in every age group, health class, gender, etc. For this reason it is important to go to a broker to get price comparisons to find the product that is right for you.

At Secure Term Insurance we are insurance brokers offering free quotes and personalized service with step by step guidance throughout the application process, underwriting process, and any assistance you may need thereafter.

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1. Getting a Quote

As an example, Greg is a married 29 year old with a newborn child. He is interested in getting a term life insurance policy to protect his family in the event of his death. Greg can go directly to an insurance company and will receive a quote from just that company. Or he can go to an insurance broker and receive quotes from multiple companies so as to compare them. For this reason it is advisable to go to an insurance broker when shopping for term life insurance. Term life insurance quotes are based on age, health, term length desired, and death benefit amount desired.

2. Choosing a Term Length

Greg has a wife, a newborn child, and also a 30 year mortgage. In choosing a term length, he would like a term policy that lasts for the duration of his mortgage. He also hopes to one day send his child to college and potentially graduate school, so he wants the policy to last at least until his child is an adult. Therefore, a 30 year term policy seems like a good term length. If Greg dies at some point within the next 30 years the death benefit will go to the beneficiary of his choice, which in this case is his wife Kimberly.

3. Choosing a Death Benefit Amount

Greg is the main breadwinner of his family. He currently makes $100,000 a year. After assessing his financial situation including his income amount, outstanding debt, junior’s educational costs, and potential final expenses, he decides that he should have a policy with at least $1,000,000 of death benefit. Here is a needs assessment test to take if you are considering term life insurance. Greg’s insurance broker presents him quotes with 30 year term lengths with a death benefit of $1,000,000. The best quote comes in at $700 per year, assuming that Greg is in good health. Keep in mind that the pricing and the financial stability of the insurance company are both important factors to consider when shopping for term life insurance.

4. Underwriting Process

Greg decides to pursue the policy at which point the broker sets him up with a paramedical exam. The paramedical exam can be taken at his home, his work, or wherever he chooses. It includes a blood test, and a urine test. The results are sent to the insurance company. The insurance company may also request doctor records.

5. Policy Approval & Delivery

Once Greg is approved the policy is issued and the broker delivers it to him in exchange for the first premium amount, which in this case is $700. Keep in mind, you can opt to pay the premiums monthly if you would like.

6. How Does Term Life Insurance Work?

Once the check is received, the coverage is bound. Greg’s premiums are level at $700 per year for 30 years. As long as he pays the premium every year his $1,000,000 of death benefit is in force. If he dies within the 30 year period, the $1,000,000 will go to his beneficiary. If he does not die within the 30 year term the policy ends after year 30. At that point, if he wants to get a new policy he will need to reapply and go through underwriting again.

7. Know Your Rights

Many term policies can be converted to whole life policies within a certain amount of time with no additional underwriting required. You can change the beneficiaries of your term life insurance policy at any time. You can also drop your term life insurance policy at any time. For instance, if you buy a 30 year term policy you are not required to keep the policy for the entire 30 year term. There is no penalty for dropping a policy. Once you discontinue paying premiums the policy terminates and there is no death benefit coverage. However, if you do wish to keep the policy for the entire 30 year period, the premium amount is level and will never increase during the entire term length. You can add another policy at any time. As your financial needs change you can buy another term life insurance policy. It is a good idea to review your coverage to maintain the proper amount of life insurance.

8. Term Insurance is Relatively Inexpensive

It is very important for young families that have not been able to accumulate a lot of savings to buy term insurance.  Often, a term life insurance policy costs less than it costs to buy a cup of coffee per day. Proceeds from the policy create an estate for the benefit of the surviving spouse and children.

At Secure Term Insurance we are insurance brokers offering free quotes and personalized service with step by step guidance throughout the application process, underwriting process, and any assistance you may need thereafter.

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Many people do not realize that level term life insurance is an affordable way to protect your loved ones. It is easy to understand and allows you the flexibility of choosing the term of coverage and the amount of death benefit. Also, the premiums you pay are level for the entire term selected.

For example: A healthy male age 35 can purchase a 20 year term policy with a $500,000 death benefit from an A+ rated company for $255 annually, which is about 70 cents a day! The proceeds can be used to cover dependant care, educational expenses, mortgage payments, consumer debts, provide income replacement, etc.

Level Term Life Insurance Tips to go by:

1)  Level Term Life Insurance is relatively inexpensive.

Because Level Term Life Insurance is typically very affordable, there is very little reason to go completely uncovered.

2)  If you have dependants you need insurance.

Dependants include children that you support financially and in some cases older relatives (parents, grandparents, etc.) that you support financially. Also, if you have a spouse you should have insurance.

3)  You should buy level term life insurance when you are healthy.

Ideally you should buy insurance when you are healthy. This will ensure that you get a low rate for the term you choose. The sooner you buy insurance the better, because obtaining a policy is more difficult and more expensive as you get older.

4)  Buy insurance to meet your specific needs.

Add up your outstanding debt (mortgage amount remaining, car loans, credit card debt, etc.) educational expenses (the amount you would want to set aside for each of your children’s future educational expenses), income replacement amount (consider how much your surviving spouse would need in order to replace the income lost if you were to pass away), final expenses (consider an amount you would want to set aside for your funeral bills and also for potential end-of-life medical expenses).  Adding up the amounts from these categories will give you an adequate amount of insurance to buy. Keep in mind that the amount of insurance you would like is always up to you. If you feel you cannot afford to insure all 4 categories mentioned, insuring for just one, two, or three of the categories would be beneficial to your survivors. For more info see: How much insurance do I need?

5)  How do I choose a term length?

In choosing the length of the term it is advisable to buy a term policy to cover your dependants until they are able to provide for themselves. Another appropriate term length would be to buy a term policy that will give you coverage until your spouse reaches retirement age. Other ideas would be to choose a term length that coincides with the time you will be finished paying for your mortgage or finished paying for your child’s education.

6)  You can drop your term coverage at any time!

Let’s say that you qualify for and obtain a policy with a 20 year term and you are paying premiums monthly. In order to keep the coverage and maintain the same premium cost per month then you must keep up with the monthly payments. However, if for any reason you wish to drop your coverage just stop paying the premiums and there is no penalty. If you were paying premiums annually and midway through the year you wanted to stop your coverage the insurance company will reimburse you for the months that you already paid coverage for. If you are dropping your current coverage to try and go with a less expensive company, do not drop your policy until you have qualified for the new insurance with a better rate. Once you drop an existing policy you have with one company, you will have to go through underwriting again to get that same policy back. And, because you will be slightly older in age, the same amount of coverage will cost more in premiums.

7)  You can buy several policies.

Let’s say you are 35 years old and currently have a 30 year term policy to provide replacement income to your spouse in the event that you die before your planned retirement age of 65. Also, let’s say you have a child that is currently 15 and you plan to pay for your child’s college education in the future. Although you already have a 30 year policy, you can purchase a 10 year policy to meet this specific need for your child’s education. So remember that although you may already have life insurance, it is beneficial to review your coverages because your needs may change through the years.

8)  You can compare level term life insurance rates easily!

With the availability of the internet, comparing quotes can be done quickly. It is beneficial to compare rates because the same amount of coverage can be different in price by as much as 50% from one company to another. The Cheapest quote is not always best. The cheapest term policies often have stringent underwriting standards. Many companies advertise the lowest rates; however the caveat is that it is difficult to qualify for such rates. For a quick comparison of term life insurance quotes go to SecureTermInsurance.com

9)  You cannot buy life insurance without going through an agent or a broker.

Buying insurance through a broker and buying insurance through an agent are the same cost. It is important to note that when you purchase insurance it is mandated by law that a licensed agent or a broker be involved in the transaction.  There is no such thing as buying insurance directly from an insurance company so as to avoid paying a commission to an agent or a broker. Commissions are already built-in to the costs of all insurance policies. So choosing to purchase insurance through an agent or through a broker will not change the cost you pay for any policy. Keep in mind that if you are being charged a fee to get quotes then there is something wrong.

10)  Insurance Agent vs Insurance Broker

Insurance agent is often used as an umbrella term to describe a person who sells insurance. Technically, being an agent implies that the salesperson only sells insurance with one company. Agents cannot offer price comparisons from different insurance companies. Insurance Brokers are not captive to any one company. They can shop the entire marketplace to find the best product at the best price.

Looking for Level Term Life Insurance quotes? Get the coverage you need today. At Secure Term Insurance we offer free quotes and personalized service with step by step guidance throughout the application process, underwriting process, and any assistance you may need thereafter.

The post Level Term Life Insurance: A Quick Guide appeared first on Secure Term Insurance.

1)  Outstanding debt:

Consider the total amount you owe on your home, the amount you owe in student loans, credit card debt, car loans, etc.

2)  Educational expenses:

Consider how much you would want to set aside for each of your children’s future educational expenses

3)  Income replacement:

Consider the amount your surviving spouse would need to replace the income lost if you were to die.

4)  Final expenses:

Consider an amount for your funeral bills, potential hospital or doctor bills, legal bills, taxes, etc.

Add up the totals amounts from each category (Outstanding Debt, Educational Expenses, Income Replacement, Final Expenses) to derive at an accurate amount of insurance for your personal needs.

Here is an example:

John (age 35) and Susan (age 34) are husband and wife with two children.

Outstanding Debt:

They have a mortgage of $300,000 and other outstanding debt of $50,000. ($300,000+$50,000=$350,000 total)

Educational Expenses:

They have decided that they would like to have $100,000 set aside for each child’s future education ($100,000+$100,000=$200,000 total).

John’s Income Replacement Amount:

John has an annual income of $60,000 *after taxes*. Assuming retirement age at 65, John has 30 working years remaining. Assuming John’s income remains the same, John is scheduled to make ($60,000 * 30 years) or $1,800,000 over the 30 year period.

Susan’s Income Replacement Amount:

Susan makes $65,000 a year *after taxes*. Assuming retirement age at 65, Susan has 31 working years remaining. Assuming Susan’s income remains the same, Susan is scheduled to make ($65,000 * 31) or $2,015,000 over the 31 year period.

Final Expenses:

John and Susan each would like a benefit of $20,000 in order to pay for funeral bills, potential hospital or doctor bills, legal bills, taxes, etc.

Adding up the totals from each category derives an adequate amount of insurance for John and Susan to purchase.

John will buy a policy with a death benefit of ($350,000 + $200,000 + $1,800,000 + $20,000) = $2,370,000 and name Susan as the primary beneficiary. Also, John will name the children as the secondary beneficiaries so that if Susan is no longer alive the children will obtain the benefit.

Susan will buy a policy with a death benefit of ($350,000 + $200,000 + $2,015,000 + $20,000) = $2,585,000 and name John as the primary beneficiary. Also, Susan will name the children as the secondary beneficiaries so that if John is no longer alive the children will obtain the benefit.

Keep in mind that the amount of insurance that you want to purchase is always up to you. Furthermore, replacing one’s entire income in the event of death is not always necessary or possible.  However, to go completely without life insurance when you have loved one’s that depend on you is a mistake. Life Insurance is a vital part of a good financial plan and even a relatively small amount can be beneficial in the event of the unexpected.

At Secure Term Insurance we offer free quotes and personalized service with step by step guidance throughout the application process, underwriting process, and any assistance you may need thereafter.

The post How much Term Life Insurance do I need? appeared first on Secure Term Insurance.

1.  Are you married?

With a term life insurance policy you can leave money to your spouse in the event of your death. A term life insurance policy is especially good for newlyweds that do not have considerable savings yet. This is because term insurance is relatively cheap.

2.  Do you have a mortgage?

Term insurance is great to insure mortgages because a mortgage is a payment that only lasts for a set period of time. Getting a term policy that lasts for the duration of the mortgage will give you peace of mind. If you were to die unexpectedly, your spouse would be able to keep the house using the proceeds from the policy.

3.  Do you have kids?

If you have kids you should definitely have a term policy! Your children depend on your income for survival. A good idea is to get a 20 year term policy when your child is born. This way you will be insured up until the point that your child reaches adulthood. If you die within the 20 year period, your child will be taken care of financially.

4.  Do you have a lot of debt?

If you have a lot of debt you are going to want to have term insurance. This way your spouse and kids are not burdened with your debt in the event of your death.

5.  Are you the main breadwinner?

If you are the main breadwinner in your family, it is important to protect the income that you would be lost in the event of your death.

6.  Do you want to cover your final expenses?

Having a funeral and burial is expensive. Furthermore, there might be outstanding medical bills. A term insurance policy will help cover these final expenses so that your family is not overwhelmed financially.

7.  Do you want to leave money to your heirs?

With a term life insurance policy, you can leave money to your children, spouse, or anyone that you care for. You can also change the beneficiary at any time or name multiple beneficiaries.

8.  How old are you?

Keep in mind that the older you get the more expensive a policy will be. If you need term life insurance it is best to act sooner than later.

9.  How is your health?

If you feel that you are in excellent health, you may not need to take a physical exam to purchase a policy. Certain life insurance companies will waive the physical exam and simply perform a phone interview.

10.  Are you a smoker?

Even if you are a smoker you may still be able to get term life insurance. Some life insurance companies have affordable rates for smokers.

11.  Do you already have life insurance coverage?

It is always good to review your life insurance coverage because your needs for insurance may change. You might need an additional term life insurance policy in addition to what you already have. Purchasing a term life insurance policy is a great way to protect the people you care about. Don’t wait until it’s too late.

Get the coverage you need today. At Secure Term Insurance we offer free quotes and personalized service with step by step guidance throughout the application process, underwriting process, and any assistance you may need thereafter.

The post Do I Need a Term Life Insurance Policy? appeared first on Secure Term Insurance.