Term Life Insurance
Term Life Insurance Information
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What is Life Insurance and Why Do I Need It?
Most people are familiar with the basics of life insurance. You pay a premium and your family receives a monetary payout when you die. But there is more than one type of life insurance policy that can protect your family’s financial future.
You must decide which type of life insurance is right for your needs. There are many kinds of life insurance, but they generally fall into two categories: Term Life Insurance and Permanent Life insurance policies.
Term Life Insurance is designed to meet temporary needs. It provides protection for a specific period of time (the "term") and generally pays a benefit only if you die during the term. This type of life insurance often makes sense when you have a need for coverage that will disappear at a specific point in time. For instance, you may decide that you only need coverage until your children graduate from college or a particular debt is paid off, such as your mortgage.
Term life insurance is the most affordable type of life insurance. This makes it popular among young adults who are just starting families of their own. With a term life policy, you select the number of years—the term—in which your policy will be active. You may find monthly premiums to be affordable. But, keep in mind that dependents will receive a payout only if the policyholder dies within the specified term.
If you wish to leave a legacy behind for your family, life insurance is an important consideration. Term life insurance provides an affordable way to ensure your family can continue making ends meets. Because this is the most basic type of life insurance, it’s easy for many to fit it into their budgets. And you’ll pay the same rate for your entire term, regardless of waning health.
Most insurance providers allow you to select a term of one to 30 years, giving you the option to lock in your rate for longer. When you renew a term life insurance policy, your new rate is recalculated based on your current health and other factors. This is why many people lock in their rate for longer terms.
In contrast, Permanent Life Insurance provides lifelong protection. As long as you pay the premiums, and no loans, withdrawals or surrenders are taken, the full face amount will be paid. Because it is designed to last a lifetime, permanent life insurance accumulates cash value and is priced for you to keep over a long period of time.
It's impossible to say which type of life insurance is better because the kind of coverage that's right for you depends on your unique circumstances and financial goals. And in some cases a portfolio combining both term and permanent life insurance may be best.
But remember, the best way to figure out the amount and type of life insurance that makes sense for your particular situation is to speak with an experienced, qualified licensed independent life insurance agent.
RWM Insurance brokers have been helping clients since 1970.
Are you wondering how much life insurance would cost you? Call us or fill out a quote form today, and let our agency find a policy for you. All it takes is a few minutes to provide your family with years of financial protection.
Should I Buy Supplemental Life Insurance From My Employer?
Costs for Typical Supplemental Group Life Plan vs. Individual Policy
(Male, born June 1985, Issue Age 33)
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Group Certificate Insured Age
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Not Portable
Death Benefit
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Premium Increases
(Every 5th Year)
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Not Guaranteed Annual Premium
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Not Guaranteed
Bi-Weekly Premium
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Age 33
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$1,000,000
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$ 710.00
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$ 27.30
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Age 35
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$1,000,000
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in 2 yrs
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$ 800.00
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$ 30.76
|
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Age 40
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$1,000,000
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in 7 yrs
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$ 1,000.00
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$ 38.46
|
|
Age 45
|
$1,000,000
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in 12 yrs
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$ 1,500.00
|
$ 57.69
|
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Age 50
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$1,000,000
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in 17 yrs
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$ 2,210.00
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$ 85.00
|
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Age 55
|
$1,000,000
|
in 22 yrs
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$ 3,900.00
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$ 150.00
|
|
Age 60
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$1,000,000
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in 27 yrs
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$ 5,900.00
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$ 226.92
|
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Individual Contract
Insured Age
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Portable
Death Benefit
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Guaranteed
Level Premium
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Guaranteed
Annual Premium*
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Guaranteed
(Payable Monthly, Quarterly,
Semi-Annual or Annual)
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Age 33 thru 63
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$1,000,000
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30 years
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$ 734.00
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n/a
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Top 10 Reasons to NEVER purchase Supplemental Group Life Insurance
- Higher Cost: Overpriced usually by 200%+ due to adverse selection pool. Open enrollment means little or no medical requirements to join, so healthy employees subsidize those with medical issues. Group Life is essentially a high cost, high risk insurance pool - premiums are rated to account for this. People with just average health can always buy superior individual coverage for a fraction of the cost.
- Premiums Increase: Group rates are not guaranteed and will increase substantially every 5 years. Don't be fooled by teaser rates at a younger age. Individual policies have guaranteed level premiums available from 10 to 30 years.
- Not Portable: Coverage stops & cannot be taken with you when employment ends.
- Tax Cost: Free Group coverage is a good deal, but not be completely free. Coverage 100% paid by an employer (no employee cost ) requires the insured to report additional taxable income under IRS Section 79 calculated on coverage amounts over $50,000.
- Fuzzy Comparisons: Group rates effectively mask the high costs (quoting charges over 26 time periods per year) and can be are confusing. Always compare premiums using the total annual premium for each current and future year. Group premiums are almost never subsidized.
- Cancel-able: The Insurance Company, Employer, & Association can all cancel coverage at any time. The rates and coverage are typically guaranteed only 30 days. A Group policy is a certificate, so you have no ownership or control. An Individual policy is a guaranteed contract you own, a major difference in your favor.
- Disappearing Coverage: Coverage decreases and terminates at older ages, and usually gone by age 70.
- No Continuation: If a Group conversion exists (very unlikely) to continue with a permanent policy of some ind, it is highly over-priced. So even if you are totally uninsurable, it may be of little or no value.
- No Guarantees: In addition to not guaranteeing any future coverage (see Cancel-able), the Group Life death benefits and rates can be changed or discontinued at any time. The projected rates increase substantially - and faster - every 5 years. There is no guarantee or limit on future cost increases.
- Summary: Purchasing supplemental group life insurance through your employer is easy and convenient, but is only a good idea for employees who have severe health issues or not insurable.
Since 1970, RWM Insurance Brokers, (Rogers, Wollin & Moody) is a unique, industry award winning, independent life insurance brokerage firm. No other agent or broker will give you more competitive pricing information. Studies show most agents claim to be independent brokers, but represent less than 5% of the top carriers. In researching the best coverage for you, we evaluate not just multiple companies, but every* policy available in the USA. By working for you, not an insurance company, our goal is to provide the absolute best performing life insurance policy at the lowest cost from a top rated insurance company.
*We also represent carriers not available to other agents. The financial press rates RWM's shopping system ‘the most objective and useful in the nation’.
Contact us today for a free consultation!
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