Most adults understand that they need life insurance to cover financial risks when they die, especially if you have a family who relies on your income to take care of monthly expenses that will need to be dealt with if you should die unexpectedly.
However, what many adults are not sure about is how much life insurance they need and the type of policy that will be the best fit for their budget.
In this article, we’ll discuss a $750,000 term life insurance and why it may or may not be the best choice for you.
Why $750,000 Term Life Insurance?
How do you know if a $750,000 life insurance policy is right for you? Well, like about everything else in life, there’s an app that can help you make that decision. The app is called a “financial needs analysis”, and any insurance professional who is worth his or her salt should be delighted to walk you through it.
In simple terms, a financial needs analysis will help you calculate how much life insurance you need so your surviving loved ones can financially carry on if you should die unexpectedly.
Using your personal input, the application simply takes into consideration the financial needs of your survivors for “X” number of years, versus your liquid assets, and then calculates your insurance needs that result from those two numbers.
For example, John is 30 years old, married, and has two young children. John’s family have a modest home, two cars, and other small debts like credit cards. Since John is the family’s primary breadwinner, he wants to purchase enough life insurance to replace his income if he dies unexpectedly.
Here’s an example of what John’s needs analysis might look like to replace his income:
Immediate Needs
- Monthly living expenses for his family for “X” number of years
- Pay off the mortgage on the family home
- Pay off vehicle loans, personal loans, and credit card balances
Future Needs
- Tuition expenses for the private schools or college
- Continue funding his spouse’s retirement plan
- Final expenses like funeral and burial costs
The needs analysis program would consider the immediate and future financial needs of the family (using the information John provided) and calculate an amount needed to replace John’s income. Then, the program would take into consideration any other insurance John has along with the value of any liquid assets. The difference in these two numbers equals the death benefit John needs to replace the loss of his income for the family.
If John’s insurance needs are near $750,000, then that amount would be a great fit for him and his family. Additionally, John would likely be better off purchasing term insurance because the premium will comfortably fit in his budget, and he can always convert it to permanent insurance before his term insurance expires.
Medical Exam or No Medical Exam
Life insurance shoppers have another option to consider. They can choose a policy that does or doesn’t require a medical exam. Believe it or not, there are a lot of people out there who cringe at the thought of a medical exam. Many consider an exam invasive and inconvenient.
The good news for these folks is that many life insurance companies offer no exam term life insurance policies and some companies will offer face amounts of up to $2 million.
Ten or more years ago, if you wanted no-exam term life insurance, there were not as many companies that offered it as there are now, plus you had to pay more for bypassing the medical exam. Not true today. Since term life insurance has become so competitive, and there is new technology that reduces the overall cost of underwriting, no exam life insurance rates are very competitive with policies that require a medical exam.
In the next section, we’ll illustrate the rates for a $750,000 term life insurance policy with a medical exam versus without a medical exam.
Best Rates for a $750k Term Life Policy
The rate chart below takes into consideration a 20-year $750,000 term policy for a healthy non-smoker:
| Age | Medical Exam | No Exam |
|---|---|---|
| 25 | $24.42 | $26.36 |
| 30 | $25.06 | $27.16 |
| 35 | $27.22 | $30.62 |
| 40 | $39.70 | $43.89 |
| 45 | $65.46 | $70.45 |
| 50 | 101.9 | $120 |
| 55 | $166.37 | $190.54 |
Best Companies for Term Life Insurance
As we mentioned earlier, the competition in the term life insurance marketplace has become pretty ferocious over the years and this certainly benefits insurance shoppers looking for the best rates.
Although monthly premium is a primary part of the decision process, it’s important to consider the company you might do business with. After all, a life insurance policy is a promise from the insurance company to pay a benefit in exchange for your premium, so you want to choose a company that demonstrates they can keep that promise.
We recommend that you consider a company’s financial stability, customer service ratings, and claim service ratings as part of your decision-making process. There are a lot of companies to choose from and some are better than others.
Here are three of our go-to Term Life Insurance Companies:
Year Established: 1907
A.M. Best Rating: A+
Competitive: Top 3
Year Established: 1905
A.M. Best Rating: A+
Competitive: Top 3
Year Established: 1919
A.M. Best Rating: A
Competitive: Top 3
Not only are each of these companies highly rated, very competitive, and offer outstanding customer service, they each offer a wide range of optional insurance riders that will allow you to customize your insurance policy by broadening the coverage and adding living benefits.
In Conclusion
As an established and reputable independent insurance brokerage, we invite you to fill out our instant insurance quoter to find our list of insurance carriers that offer $750k term life insurance policies and find an acceptable rate. You can click on the application request button here on the page.
