You might think a $250000 term life insurance policy would be okay but consider that it might not be as much as you need to protect your family. Aside from the cost, it may not provide enough coverage if you die suddenly.
Your amount of coverage should be primarily based on the financial risk you’d like to reduce or eliminate, and when you consider the need to replace your income, $250,000 in coverage may or may not be enough.
There are considerably more options that should be considered if you’re searching for affordable term life insurance in 2022. Quite frankly, life insurance for any reason is generally more about the death benefit and premium. When you are looking at $250000 term life insurance, you have many options you’ll want to consider.
Medical Exam or No Medical Exam
Understanding that most applicants are generally opposed to undergoing a life insurance medical exam, we’ll discuss the option first. Whether you are considering term life insurance or permanent life insurance, there are life insurance companies that offer the no medical exam option although they will still inquire about your medical history.
Since most insurance shoppers use rates as their most important criteria, and that’s certainly important, but if your coverage amount falls short of the financial needs of surviving loved ones, you’ll likely wish you had considered the financial needs of your surviving loved ones before deciding on your term length.
Discovering the amount of life insurance coverage you’ll need that will fit your circumstances and monthly budget can be easily calculated by using a life insurance needs analysis program. As insurance professionals we will be glad to walk you through the process.
Policy Term Options
If you know anything about term insurance, you probably know that it’s temporary coverage and you have options on the length of time you want to be covered. Insurers typically offer term policies that range from 5 years to 30 years but lately, policy terms of up to 40 years have become available.
It only makes sense that the length of the policy term will impact your rates, so you don’t want to purchase a 10-year policy to save money when your circumstances actually call for a 30-year policy.
On the other hand, you don’t want to pay a higher premium for a 30-year policy when your insurance needs suggest that 20 years of coverage will work fine. For example, if your kids will be on their own in 15 years and your mortgage will be paid off in 20 years, a 30-year policy may not be the best way to go.
Here is an example of how the policy term can impact the monthly premium of a $250,00 policy on a healthy male non-smoker:
|Age||10-year term||20-year term||30-year term|
As you can see in this chart the length of the policy term you select will greatly impact the premium you pay over the term of your policy.
Insurance Rider Options
Your $250,000 term life insurance doesn’t have to be just a death benefit. Many companies offer optional insurance riders that allow you to broaden your coverage and add living benefits to your coverage. Here are the most common riders and how they work:
|Insurance Rider||How it Works|
|Conversion Rider||A term conversion rider provides for the policyholder to convert their term insurance to permanent insurance without medical underwriting. (Highly Recommended)|
|Accidental Death Benefit||The accidental death benefit provides for the insurer to pay an additional death benefit amount (usually a multiple of the death benefit) if the insured’s death is the result of an accident.|
|Waiver of Premium||Under the waiver of premium rider, the insurer will waive insurance premiums if the insured becomes permanently disabled and cannot work.|
|Accelerated Death Benefit||An Accelerated Death benefit rider pays a percentage of the death benefit to the insured if diagnosed with a terminal illness or other covered medical condition. Many term policies have this rider built-in with the core coverage.|
|Child Term Rider||The Child Term Rider (CTR) allows the policyholder to purchase term insurance that will cover all eligible children in the household up to a specific age. Additionally, when the child ages out of coverage, they can convert the term coverage to permanent life insurance without proof of insurability.|
|Return of Premium||The Return of premium rider provides for the insurance company to refund all premiums paid into the policy if the insured outlives the policy term. The refund is paid in a lump sum and is tax-exempt.|
|Long-Term Care Rider||The long-term care rider provides for the insurance company to pay a monthly benefit to the insured who must undergo long-term care.|
Although these are the most popular riders, rider selection typically varies by the insurance company. Be sure and speak with an insurance professional regarding the rider selection of companies you may be interested in.
Insurance Company Options
Since term life insurance is the largest selling type of life insurance, the competition between insurance companies can be brutal, which is an advantage for insurance shoppers. More competition typically results in lower life insurance quotes and more benefits for the policyholder, and that’s a good thing. No longer are you required to buy life insurance from a company with cookie-cutter policies.
Unlike Universal Life insurance, which is flexible, once you’ve purchased a level-term life insurance policy, your death benefit and premium are locked in for the entire policy term, so you’ll always be aware of your cost of life insurance. Moreover, you’ll have the option of forgoing a medical exam, and compared to other types of life insurance products, your policy can be issued in a few days rather than a few weeks or even months.
Although there are many life insurance companies that offer quality products and affordable life insurance rates, we have discovered over the years that some do much better than others when it comes to financial stability, customer service, claims services, and premiums.
Here are our top 10 (in no particular order):
- Haven Life
- Mutual of Omaha
- Lincoln Financial
The news gets even better when it comes to companies we represent. We can electronically submit your quote request to every company simultaneously which allows us to provide you with your term life insurance options almost immediately allowing us to take the waiting out of comparing quotes!