I'm trying to decide between 20 vs 30 year term life insurance policy?
I want to buy a Term Life Ins Policy for the purpose of leaving some money for my kids once I'm gone. I am a healthy 55 yr old fem. I'm considering a $250K policy. For a 20-year term it is $59.72/mo. For a 30-term it is $198.52/mo. Let's assume that I will live beyond the 30 yrs. At that time I will have to buy another term or convert to whole life, and most likely have to get another med exam (at age 75 or 85). Which term policy would be cheaper in the long run? I am considering a smaller policy ($100K) for 30 years at $92/mo to save money. What should I do?
If you want to make sure that you have a certain gift amount to leave to your children you can take 1 of 2 approaches.
1) Buy a whole life insurance policy for the amount you want to give or the amount you can afford. No risk. That $100K or whatever will be there if you die tomorrow or at age 120.
2) Buy the term policy for 20 or 30 years, and take advantage of the lower premium to be sure that you save up for the gift amount you want to leave by the time the term runs out. This is a little more efficient because you can control where you save and can probably get a better return on your money, but you take on a little more risk because the burden is going to be on you to make sure you save that money.
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Statistics show that only 2-3% of death claims are paid by Term insurance. It either runs out before it's needed, or it gets too expensive to renew in later years.
My recommendation is to contact a local agent to do a free Financial need Analysis (FNA), or other Total Needs Program, to help you determine how much life insurance you need for what you want it to do.
The FNA will also detrmine if you need Disability Income insurance. The chance of disability is greater than death before age 65.
Personal example: I was diagnosed with terminal cancer with just a few months to live at age 61. I am on disability. I had told my clients for 30 years about the statistics of being disabled, but didn't think it would happen to me, although I was financially prepared when it happened.
You may want to have a combination of Term and Permanent; the Permanent being a participating (pays dividends) policy, with the dividends being used to purchase paid-up additions. This way, the insurance amount will increase, with the premiums staying the same.
If you take Term now and convert it in 20 or 30 years to Whole Life, you had better have a whole lot of money in the bank to convert it all.
A local agent can explain how the combination of Term and Permanent works.
References :
Retired agent/mgr., 30 yrs.
Former FNA trainer
If life insurance policies have you confused, you should read this for more information.
Currently a 30 yr term life insurance policy is the longest term length available to purchase with most life insurance carriers. Although AIG or American General has a select a term product out right now that will allow you to select either a 31,32,33,34 up to a 35 year term plan. Simply amazing that you can be able to get term rates and coverage for that time period with term like rates!
30 year term plans have been very popular with the mortgage life agents and buyers, you can actually put a policy in force for the life of your mortgage. This policy will pay off the debt left on the outstanding balance and if you have held the insurance for a number of years you should have monies left over to help with other debt or to invest.
30,20,15,10,5 year term, How do I choose?
Once again, it depends on your situation and what you want out of or need from your life insurance policy. If you have a strong financial portfolio in place you may not need your insurance policy to accumulate cash value. What you do want however, is to protect your family's financial future in an affordable, economical way. A great solution for this is to consider a 30 year level term insurance. A 30-year Level term like all term life insurance provides life insurance protection only. It does not accumulate cash nor is it eligible for dividends but, offers you premiums and a face value that remain level for the first 30 years of your term life insurance policy. When your term coverage ends you may choose to renew it but at an annually increasing premium rate. The good news is that you do not need evidence of insure ability meaning you do not need an exam to re-qualify or to convert your level term policy to a cash building permanent life policy. The not so pretty news is that the longer your term coverage the more expensive your level premium is so when you renew your guaranteed annual premiums will be costly. Annual renewable term (ART) and convertible rates also increase annually but are typically much less. In addition eligibility can be available to individual applicants between the ages of 18 and 50. Most of the 30, 20, 15, 10 year level term plans have all of the same features that a 30 yr plan does. Minor changes apply like when you can convert the policy and at what ages, but for the most part they are very similar except in the term length. Remember that 30yr term plans will cost more than the other plans due to the fact the insurance company is guaranteeing they will pay your claim if you die and the policy is still in force during the thirty years.
Know the benefits of 30 year level term life insurance here
http://www.lifeinsurance-pros.com/term-life-insurance-policy/30-year-term-life-insurance.html
References :
http://www.lifeinsurance-pros.com/term-life-insurance-policy/30-year-term-life-insurance.html
If you want to make sure that you have a certain gift amount to leave to your children you can take 1 of 2 approaches.
1) Buy a whole life insurance policy for the amount you want to give or the amount you can afford. No risk. That $100K or whatever will be there if you die tomorrow or at age 120.
2) Buy the term policy for 20 or 30 years, and take advantage of the lower premium to be sure that you save up for the gift amount you want to leave by the time the term runs out. This is a little more efficient because you can control where you save and can probably get a better return on your money, but you take on a little more risk because the burden is going to be on you to make sure you save that money.
References :
My blog: http://gardenstatelifeinsurance.blogspot.com/
They all have explained it very well and yes you should consider a FNA and also think about combination of policies.
I f you need anymore help Let me know I would be happy to help.
References :
You can easily check life insurance quotes in internet, for example here – lifeinsurance.awardspace.info
References :