Life Insurance

If you are paying for your child’s tuition with your own income then it is recommended that you obtain a life insurance policy. This way your child will have the money to continue their education in the event of your death. Term life insurance is a great option because it is a relatively inexpensive form of life insurance and you can choose how long you want the policy to last. A good idea is to buy a term policy that will last until after your child’s college years.

Health Insurance

If your child is off to college for the first time then it is likely required by the school that your child obtains a health insurance policy. The college may offer its own health insurance plan, but make sure to understand the policy completely before committing to the plan. Keep in mind that plans have varying deductibles, out of pocket maximums, drug benefits, and doctor networks. Aside from policies offered through the school, there are plans available through the health insurance marketplace. Open enrollment starts Nov.1, 2016 and ends Jan. 31, 2017.

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

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For example: A 35 year old female in excellent health can purchase a $1,000,000 death benefit for a term length of 20 years for $380 per year.  That is $1.04 per day, which is quite a bit less than the cost of a morning latte.  A 30 year term policy can be purchased for as low as $680 per year, which is $1.86 per day!

A 35 year old male in excellent health can purchase a $1,000,000 death benefit for a term length of 20 years for $442 per year.  That is only $1.21 per day.  A 30 year term policy can be purchased for as low as $815 per year, which is $2.23 per day!

These quotes are from an insurance carrier that has an A+ rating from A.M. Best rating agency.

Term Life Insurance Cost (continued):

Term Life insurance quotes are based on your age, health, death benefit amount desired, and the term length desired. If you are a smoker you may still qualify for term life insurance. Most all term life insurance policies have a level premium amount. So the premium does not change from year to year. To find out how much term life insurance you need, here is a simple checklist to reference. 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 life insurance.

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.

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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.

Whole Life Insurance

1.  Provides death benefit coverage for life.

As long as you pay your premiums, your whole life insurance policy remains in force. The whole life insurance policy provides coverage for your entire lifetime. This is different from term life insurance, which only provides a death benefit for a set period of time. 10 years, 20 years, and 30 years are common term lengths.

2.  Builds cash value

In a whole life insurance policy, a portion of the premium that is paid accumulates into a cash value account. The cash value account accumulates on a tax deferred basis and accumulates at a competitive interest rate. A term life insurance policy does not accumulate any cash value and only provides a death benefit for the set term.

3.  Can provide supplemental retirement income

The money that has accumulated in the cash value account from your whole life insurance policy can be borrowed out of the policy and can be used to supplement your retirement income. You do not have to wait until you retire to borrow money out of the policy. You can take the money out any time you wish.

Term Insurance

1.  Provides coverage for a set term length

Common term length options are 10 year, 20 year, and 30 year terms. The premium amount remains level throughout the term period. Once the term is over the life insurance coverage terminates and you must reenter the market if you want coverage again.

Keep in mind that the older you are when you apply for coverage, the more expensive premiums will be. Some term policies have a term conversion option which will allow all or part of the death benefit amount to be converted into a whole life policy without proving insurability. This allows the insured person to continue coverage without having to reapply for life insurance when the term policy expires.

2.  Provides only a death benefit

There is no cash value build up in a term life insurance policy. A term policy provides a death benefit only. A whole life insurance policy builds cash value and provides a death benefit as well.

3.  Cheapest option

The premiums on a term life insurance policy are less expensive than the premiums on a whole life insurance policy. Term life insurance is especially helpful for young families that do not yet have significant savings. The younger you are and the healthier you are when applying for term insurance coverage, the less expensive the premiums will be. For some people, term insurance premiums can cost less than purchasing a cup of coffee every day.

4.  Common term lengths are 10, 15, 20, & 30 year terms

When choosing a term length. Here are some questions to consider. How many more years until you reach your planned retirement age? How many years until your child becomes an adult? How many years are left on your mortgage?

Now that you understand the difference between Term Life Insurance vs Whole Life Insurance, you will be able to purchase a life insurance policy that will provide the financial security that you need for your family.

Whole Life Insurance vs  Term Life Insurance

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.

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