California Term Life Insurance
If you are a resident of California, you may be overwhelmed by the variety and complexity of the different kinds of life insurance policies available. You want the peace of mind that comes from knowing your family will be taken care of in the event of an untimely death, but how will you know which life insurance policy gives you the maximum benefit for your personal situation? That is why the decision to purchase life insurance is one of the most important decisions you will ever make. It is important, but it does not have to be difficult.
There are a lot of things to consider when choosing the policy that best suits your needs, and SavePro makes that decision easier by doing more than just quoting you the cheapest price. We will evaluate the providers to find you the best value, and provide you with peace of mind.
Is Term Insurance Right for You?
Most people have great plans for themselves and their family and, quite often, those plans require a good deal of funds. Whether it's sending children to college, purchasing a new home, or starting a business, adequate financial resources are essential. Your income is the engine that powers these dreams, helping to turn them into reality, but what if you were to die? How would this affect your family's future plans?
For generations, life insurance has proven to be one of the most cost effective ways to safeguard a family's dreams. You can never be replaced but, with life insurance, your family could probably handle the financial pressure that comes with the loss of income due to premature death. The proceeds of life insurance generally pass to your beneficiaries free from federal income tax and can be used to help preserve your family's standard of living, cover outstanding debts, and keep their dreams alive. For many years, term life insurance has proven to be an effective means of providing protection for those who need coverage for a limited period of time.
Why is Term So Popular?
Term insurance is perhaps the most basic form of life insurance. It usually provides affordable protection, often with a guaranteed premium, for some period of time. If the insured should die while the policy is in force, the face amount is paid to the named beneficiary. At the end of the premium guarantee period, the insured can renew the coverage at a higher premium. The premium for term insurance is initially lower than a comparable permanent insurance policy; however, it can increase at each renewal. This initial lower premium usually makes term insurance an ideal choice for individuals with a temporary need for life insurance protection.
Unlike permanent insurance, term does not accumulate cash value, and in most instances does not earn dividends. There are two basic types of term policies: increasing premium term, which renews annually at a higher premium, and level premium term, which features a fixed premium for a specific number of years and then increases in subsequent years.
When is Term Appropriate?
Term insurance may be suitable in several situations. Here are just three examples:
- Temporary Need for Protection - Term insurance is often used as protection when a loan is taken. A term policy in the amount of the loan could assure that the debt is repaid in the event the insured dies. A business owner who borrows money to enlarge his or her operation could purchase a term policy in the amount of that loan. Often, homeowners choose term insurance to protect their mortgage over the life of the loan, or, parents who are funding a child's college education could use term as a hedge until that child graduates. Whenever life insurance is needed for a relatively short period of time, term may be the solution.
- Limited Funds for Permanent Life Insurance - In situations where life insurance is essential but dollars are scarce, term could serve as a stop-gap. Individuals fresh out of college and starting a career may want to consider term coverage. If they're like many students, they probably have student loans that need to be repaid. If they should die before the loans are repaid, that obligation could fall to their estate. Term insurance could safeguard against that, and when they've achieved some level of success and have sufficient funds, they can convert the term policy into a permanent insurance policy.
- As a Supplement to Permanent Life Insurance - An excellent use of term insurance is as an added "rider" to a permanent plan. Let's say an individual requires $200,000 in life insurance coverage but can't afford the premium for a 100% permanent plan. An affordable option may be to purchase a $50,000 permanent policy with a $150,000 term rider. That mixture would provide the desired amount of coverage with more limited cash value accumulation, at a premium that fits within a given budget. In the future, when income increases, the term portion can be converted into permanent insurance.
What to Look For in a Term Policy
When choosing a term policy that's right for you, you'll want to be sure to look closely at the features it offers.
Be sure that the policy is guaranteed renewable — that is, you can renew your policy without a physical exam. Also be sure that it contains a conversion privilege. These two features together offer protection of your future insurability.
Some companies offer a rider to extend the premium guarantee (sometimes called a modification of premium guarantee rider), which, for an additional cost, guarantees that for a limited time, the premium will not be greater than the scheduled premium stated in the policy contract. This could give you the peace of mind that, in the short term, premiums won't be out of your price range.
For many years, insurers have offered a lower cost premium to non-smokers. Recently, some companies have added an additional standard premium class for individuals who smoke, but are otherwise in good health, and non-smokers with minor medical impairments. If one of these situations applies to you, it could save money to look for a company that offers such a rating class.
Most experts say it's not advisable to simply shop for the policy with the lowest premium. Before worrying about saving a few bucks, you'll want to be sure that the insurance company is financially sound. Longevity, size, and ratings are key considerations when choosing an insurance company. You can check the financial health of insurers by reading what the independent ratings agencies say about them. A.M. Best and Standard & Poor's are two companies that annually publish ratings of insurance companies.
Term Life Insurance
If you are shopping around and asking yourself "what is term life insurance?" you are not alone! Many consumers struggle to find helpful term life insurance information to explain the differences between the various types of life insurance protection. But if you want to know "what is term life insurance," keep reading and we'll explain.
Term life insurance provides coverage for a specific period of time. You choose the term length as well as the death benefit amount (or, coverage amount). If you die while your policy is in force, your beneficiaries receive the death benefit, tax-free (based on current federal tax laws)!
Term life insurance is considered an affordable, dependable and practical solution. It's the #1 life insurance choice for families.
The rates for a term life policy tend to be much lower than other life insurance options, such as universal life. Plus, the rate does not go up during the term length you choose! You and your loved ones are protected and there are no surprises.
In addition, term life insurance is a smart choice as part of an overall financial plan. Because the premiums are affordable, you can choose a term length and coverage amount that fits all your needs. You can plan to repay debts, cover ongoing living expenses, and save for future education costs for your loved ones.
When choosing term life insurance, you should also consider whom to cover. Obviously the primary breadwinner of the family, but it's wise to protect against the loss of income that both earners provide. Additionally, consider life insurance coverage for a spouse that does not contribute financially, but cares for children or elderly parents in the home. For example, the loss of a stay at home parent could create large childcare costs.
Term Insurance has several features that clients appreciate
- Affordability
Clients can choose to pay planned premiums comparible to term life insurance premiums for the initial period selected 10,15,20 or 30 years
- Adaptability
The policy holder can choose to extend coverage beyond the 10,15,20,30 years initially selected. The planned premium increases to support the longer death benefit guarantee.
- Predictability
Unlike the term conversion, the cost of extending the death benefit guarantee beyond the initially selected period is known and guaranteed at issue making long term planning easier.
- Simplicity
You can pay your monthly premiums automatically by setting up automatic back withdraw.
Client Profile
- Has a need for a specific period of coverage met by term life insurance
Facts at-a-Glance
- Coverage Durations - 10, 15 or 20 years
- Features - Guaranteed level premiums for selected coverage periods of 10, 15 or 20 years
- Minimum Specified Amount - $50,000 at issue; $50,000 minimum in-force (after decrease)
- Riders Available - Waiver of Premium, Children's Level Term Insurance, Accelerated Death Benefit
Riders Enhance the Value of The policy
With available riders, you can tailor and enhance the value of Term 10, 15 and 20 protection. As individual situations require, your clients can benefit from the additional coverage provided
- Waiver of Premium Rider
With this coverage, if you becomes totally disabled, the company will waive premium payments that are due during the disability period. Rates change when the policy’s premiums change. Rider coverage ends on the policy anniversary nearest the insured’s 60th birthday
- Children’s Level TermInsurance Rider
This rider provides the opportunity for you to obtain term life insurance coverage for each dependent child (ages 15 days – 23 years). Up to $10,000 coverage may be purchased in $1,000 increments. This additional coverage on a dependent child will end on the earlier of the child’s 25th birthday or the policy anniversary nearest the insured’s 65th birthday.
- Accelerated Death Benefit Rider
With the addition of this rider, the company will provide a lump sum benefit if you are diagnosed with a terminal illness that reduces life expectancy to 6 months or less in most states. There is no initial cost. Interest will be charged at the time of payment and an administrative fee will be deducted when the option is exercised. Availability varies by legal entity
Do you need to take a life insurance exam?
To get the best low cost term insurance rate a brief, free, medical exam is usually required. This physical exam is done at your home or office by a nurse who is paid by the insurance company. However, in many instances it is possible to get a term insurance policy with no medical exam.
The cost of these plans is usually a little more, but, you can be approved in minutes with some companies. Also each company that offers no exam life insurance limits the coverage you may obtain. For most insurance companies the maximum amount of term insurance coverage is limited to $300,000 or less, although some companies cover more in certain situations.
How long are my term insurance rates locked in?
The term insurance quotes you receive can be for coverage that is provided, with no increases, for periods of 5, 10, 15, 20, 25, even 30 years. This allows you to only pay for coverage you need, for the exact amount of time you need it.
Essentially, this is the primary reason most people buy term insurance. It allows you to cover and protect your family for a large amount of life insurance for the lowest cost possible.
