How much Term Life Insurance do I need?
Since life insurance replaces lost income if something happens to you, the proceeds from your policy should be enough to cover immediate expenses as well as to provide continuous income for your beneficiaries. Most financial planners recommend coverage that's 5 to 10 times your annual income. For example, if you make $50,000, you might consider coverage between $250,000 and $500,000. If you're younger and just starting a family, you might need as much as 15 times your income to allow for salary increases. Since individual needs vary, we recommend that you speak to one of our licensed agents to help you determine what's right for you. We also recommend you consult your attorney or financial advisor for professional legal, tax and financial planning advice.
What does "guaranteed" mean when you are talking about my premium?
'Guaranteed' refers to the annual premium you pay on your policy. For example, a fully guaranteed 20-year term means that your premium is guaranteed to remain the same, or level, for a full 20 years as long as you pay the premium. The coverage, or death benefit, also remains level. The insurance company cannot cancel your policy or raise your premium for the length of the term, as long as you pay the premium. The same is true for 10-year, 15-year, 25-year, and 30-year guaranteed terms.
Some companies offer term policies that are partially guaranteed. We recommend that you consider only policies that are fully guaranteed, so that your rates cannot change for the length of your policy.
How long do I need protection?
The number of years' coverage you need depends on several things, but the most basic consideration is how long you expect your beneficiaries to be dependent upon your income. If your spouse is your beneficiary, you should consider being covered until you plan to retire. If it's your children, you'll probably want to protect them until they're 18 or finish college. To cover a mortgage, choose a policy that will be in place for at least the length of the loan. Depending on your age, you can purchase policies guaranteed for 10, 15, 20, or even 30 years.
Should I get a policy for my kids?
None of the companies we represent offers separate policies for children, but many do have inexpensive 'child riders'. Usually, for one flat fee applied to the parents' coverage, each of your children (current and future) can be covered for up to $25,000. Ask your personal representative about the options available in your state.
What's the difference between Term and Whole Life Insurance?
A Term Life Insurance policy covers you for a stated period—typically 10, 15, 20, or 30 years. Because the insurance company's liability is limited to a specific period, Term is the most economical kind of Life Insurance. A Whole Life Insurance policy lasts as long as you pay the premiums. Whole Life policies can also have a cash value. Part of the premium you pay covers your insurance, and some of it goes into the policy's cash value. Whole Life Insurance is much more expensive than Term Life Insurance for the dollar amount of coverage.
So as you consider the two, you'll want to ask yourself the following key questions:
Can you afford Whole Life Insurance?
Premiums for the same dollar amount of Whole Life Insurance can be two to ten times higher than a Term Life Insurance policy.
Can I convert my Term Life policy to Whole Life Insurance?
All of the term policies we sell at TermRateGuide.com are convertible to permanent insurance, also called whole life or universal life insurance, at various times during the term of the policy. This conversion takes place without you having to take another medical exam or reapply, no matter what may have changed in your health. This option provides reassurance and flexibility should your health or insurance needs change after your original purchase through TermRateGuide.com.
Can I renew my policy?
All of the term life policies we sell give you the option of renewing the coverage on a year-to-year basis once the initial guarantee period expires. Most importantly, the coverage is renewed without you having to take another medical exam or reapply, so you can continue your coverage even if there have been changes in your health. Premium charges will increase when the initial guarantee period expires, and can increase annually thereafter.
I've had some health issues. Can I still get Life Insurance?
There's a very good chance you can. TermRateGuide.com represents many companies that specialize in insuring people with less than perfect health. Since 1985, our agents have helped hundreds of thousands of people, including cancer survivors and those with diabetes or heart disease, get the coverage they need at the best price available.
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