Life Insurance Plans Canandaigua NY

A Quick Look At Term Life Insurance Plans

Let's talk a little about the term life insurance plans so we can understand what exactly we are comparing from a layman's point of view.

The term life insurance carriers have many fancy names (with lots of "Opti" and versions of "Secure" mixed into the names) but term insurance is pretty simple at its core which is a big source of its popularity. First, what is "term" and how is it different from "whole life"? Term life insurance basically means you are providing life insurance protection for a fixed period of time. You are locking in a rate or premium based on your age at the time of enrollment during that period of time but the coverage will typically not be allowed to renew after the term has completed. This period of time is usually reflected directly in the name of the life insurance plan and typically runs in 5 year increments such as 5, 10, 15, 20, 25, or 30 years. The larger the term, the more expensive per dollar of coverage. All things being equal, 20 years of $100,000 coverage will be more expensive than 10 years of coverage. This makes sense since the carrier is taking on more risk with a larger period of time.

How long do you need the term coverage for? Usually, term is purchased to offset future financial responsibilities. For example, it may replace lost income till younger children graduate from college. Term life insurance is a popular option for young adults just starting their families for this very reason. It could also be used to pay off a mortgage on a primary residence.

The other major option when comparing term life insurance plans is of course the amount of coverage. This is typically the key decision along with term length in order to provide the correct amount of coverage. Our Term Life Planner is a good place to start. Essentially, you want to estimate how much income would need to be replaced over the desired term. Inflation and interest come into play but the replacement income is a good way to approach the question of how much term life you may need. This annual income replacement multiplied by the your desired period of time is a baseline. Of course, the longer term, the more you have to account for inflation. It's smart to apply a 5% baseline inflation amount and the Term Life Planner can help with this. Term life is so inexpensive these days that it makes sense to establish your needed amount and go higher. The difference in monthly costs can be a few dollars for $100,000 of extra coverage. Try different amounts in the term life insurance quoting engine to see what the monthly difference in premium is.

When you run your term life plan quote, you will receive a list of different, competitive plans to compare with each other. We also provide the life carrier company ratings and financial strengths so you can take this into account. Term life is really a commodity these days with the options being pretty comparable. It's a question of selecting the right term for your needs, the correct amount of insurance protection, and then weighing the company strength versus monthly premium. It's that simple! The carriers offer various riders, which are special options you can add to your policy for additional premium. Our theory is that we would rather maximize our protection in terms of amount of coverage and/or term with our available premium dollar rather than add these additional plan options. Of course, this is your decision but our guidance would be to max out the term/amount to the fullest. Now that you understand how the term life insurance plans work, it's time to run your instant quote!

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