Term Life Insurance: The Basics
Everything you need to know in under 3 minutes!
Term Life insurance shouldn’t be complicated!
We’re here to help.
If you want to have a financial safety net for your family or business, a life insurance policy can do that. Plus, it’s affordable.
What does Term Life Insurance provide?
Term life insurance is the most common type of life insurance. Policies often provide temporary protection that lasts for a set period of time or term such as 10, 20, or 30 years. The coverage can be renewed but only up to a specific age, and your premiums will usually go up with each renewal. Term insurance provides a short term death benefit so your beneficiaries will receive a sum if you pass away during this time. Cash value doesn’t accumulate, but some policies may come with flexible features that allow you to use your benefits early in the event of an unexpected circumstance. Term coverage payment premiums are also locked in for the term you select.
Money For Dependants
If you have a spouse or children, you need a life insurance policy. What if there was an unexpected death, would your family be able to survive financially on their own?
A life insurance policy will provide your family with the financial cushion to: pay off a mortgage, cover any school/college tuition, extra bills/debt, emergency life expenses. Always keep your family in mind!
Single
If you are single with no dependents you may still benefit from having a policy, besides we never know what the future will bring!
The younger you are and the better health you are in, the more affordable the premium payments will be. If you have a mortgage, school loans, or any excess debt a policy will protect your family from financial stress if you were to pass.
Funeral Expenses
Today, funerals can cost up to $10,000-40,000. With the right policy you can use a life insurance to cover funeral expenses and final estate obligations when you pass away.
A term life insurance payout can cover what your beneficiaries decide to use it for. If you already have a term policy large enough to cover your final expenses you may not need a separate funeral insurance policy.
Essential Employee
If you own a business and have an employee you couldn’t live without, should really think about protecting these essential assets with a life insurance policy.
If you are cover when an employee unexpectedly passes, you will have time to restructure your business and money to cover payroll until you are able to find a replacement.
Business Partner
If you have a buy-sell agreement or a buy-out clause between business partners, having a financial plan in place will protect assets and the transaction agreement.
Other options include contracts to buy pieces of land, a facility or even another business. A life policy will provide funds to pay his/her portion until you control your business.
Loan Collateral
Using your life insurance policy as collateral is one way of securing a loan without the risk of using another big ticket item (like a mortgage or your car).
Also business loans often require collateral and many banks will accept a life insurance policy as collateral. This can be a smart way to either leverage a policy you already have, or put one in place for a specific use.
What are the Main Types of Life Insurance Policies We Offer?
Term Life
Sample $250,000 policy for
healthy 45 year old.
$20/month
A life insurance policy typically used to replace lost income due to death during working years. It can also be used for business needs such as Key Man, buy-sell agreements or even loan collateral.
Whole/Permanent Life
Sample $250,000 policy for
healthy 45 year old.
$175/month
A permanent life insurance policy that will accumulate cash value over time. These are usually used for estate needs or passing funds to family.
Universal Life and Index UL
Sample $250,000 policy for
healthy 45 year old.
$150/month
A type of permanent life insurance that has an option to earn interest based on either fixed rates or positive gains. Tied to index such as the S&P500.
How Much Life Insurance Do I Need?
Life insurance for mortgage protection is a reliable way to establish financial stability and secure a home for you and your family. It helps ensure that the financial debt you owe toward your home can be paid in the unfortunate event that something happens to you.
The best way to calculate this is by including the balance of a mortgage so your family can stay in your home without the fear of losing it. If an income replacement would already cover mortgage payments and other expenses, you don’t need to add anymore money.
Looking for life insurance that will cover your educational costs? Be sure to add tuition money to ensure your children can pay for their education in an unexpected accident.
If you have a specific type of education in mind, include everything that would need to be covered.
Take a moment to think, would your family struggle with any large debts if you passed away? Don’t leave debt to you loved ones to stress about.
Include all car loans, credit cards, medical bills and other outstanding expenses that would need to be paid off.
With the rise of inflation, things are becoming more and more expensive. Consider your family’s monthly utilities, food costs, hobbies, and entertainment.
Be sure to include everything your family would not be able to live without!
Now that you have above expenses covered, subtract what you already have in savings and investments to cover these costs!
You can include retirement savings such as a 401k plan, or leave it out if your calculations if your beneficiaries want to preserve that money for retirement years.
To make it easy, we often say, “your yearly income x 10 = good minimum policy amount”
Too Overwhelming?
USE OUR LIFE INSURANCE CALCULATOR
Get a Policy in 4 Easy Steps!
Decide which policy is best for you:
Term vs. Whole/Permanent
Most clients choose a Term life insurance policy but if you want to look at other options, we love to help you evaluate which policy works best: Whole or Universal.
Apply
Fill out an application and we can help you shop around for the best policy with some of the most trusted life insurance companies we partner with.
Underwriting
Life insurance companies will request to review your health records to determine your premium amount. Also, you may be asked to do a simple in-home exam.
Policy Accepted
Once the underwriting complete, and your premium is paid…You are covered!
Ready To Get Started?
Sometimes the hardest part is …
getting started!
Let Arlington Greene be your “expert” guide today! We are always here to help answer all your life insurance questions. We make a complicated process easy.
800-777-8376
Fax 800-765-9173
PO BOX 683306
Marietta, GA 30068
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