The Need for Life Insurance
What will your family do if you're no longer there?
In addition to health insurance and related products, Stellar Insurance Services, Inc. can help you determine if you have enough life insurance and what type(s) of policies will best serve your situation. Having adequate life insurance should be an important part of your overall financial plan. And, it may be more affordable than you think:
Sample rates on a $250,000 term life policy. Rates subject to change and underwriting.
| Gender | Age | 10-yr Term | 15-yr Term | 20-yr Term |
|---|---|---|---|---|
| Male | 20-30 | $12/mo | $14/mo | $17/mo |
| 40 | $15/mo | $18/mo | $22/mo | |
| 50 | $34/mo | $44/mo | $54/mo | |
| 60 | $82/mo | $103/mo | $133/mo | |
| Female | 20-30 | $11/mo | $13/mo | $14/mo |
| 40 | $13/mo | $17/mo | $20/mo | |
| 50 | $27/mo | $31/mo | $40/mo | |
| 60 | $54/mo | $68/mo | $93/mo |
At the very minimum, EVERYONE should have enough life insurance coverage to pay for burial expenses. According to the National Funeral Director's Association1, the average funeral as of Dec 31, 2006 costs over $7,300 - and that does NOT include burial & cemetery costs! The last thing a family should have to worry about after losing a loved one is coming up with thousands of dollars.
Even if you have no dependents that you are supporting with your income, you should consider having enough coverage to pay off any outstanding debts. Otherwise, your loved ones may be required to pay off those debts before receiving any kind of inheritance.
There are multiple types of life insurance products, and no one product is right for everyone. Below you will find a brief explanation of the various products that we offer. As always, we would be happy to meet with you and help decide which products are best for your needs.
Term Life Insurance
Term life insurance provides coverage for a preset amount of time - usually five, ten, or twenty years. If the you die during that term, the policy is paid out in full. Otherwise, the policy ends and you usually have the option to renew the policy - until you reach a certain age, as determined by the company. Since premiums are based on the age and health of the individual policy holder, they tend to increase with your age each time the policy is renewed. Once you are beyond he renewability age, the insurer may offer the option to convert the plan to a Permanent Insurance Plan.
Term life insurance can further be separated into Level Term and Decreasing Term. Level Term Insurance maintains a steady death benefit throughout time. Decreasing Term Insurance features a death benefit that decreases over time, and usually a lower premium. Decreasing Term Insurance is a popular choice for persons who wish to leave enough to cover decreasing financial obligations - such as a mortgage.
Permanent Life Insurance
Permanent Insurance provides coverage for the duration of your lifetime. It also includes a savings feature - in the form of cash value - that may be collected, borrowed, used to pay premiums, or even used as collateral for a loan. Permanent Insurance is intended for long-term coverage and typically takes a few years to build cash value. There are also variations of permanent life insurance.
Whole or Ordinary Life Insurance is the most common form of permanent life insurance. It features a pre-determined death benefit and constant premiums that are paid for the duration of the policy. The cash value builds at a fixed interest rate. Because the premium does not change, whole life coverage usually costs more than a comparable Term Life Insurance policy in the early years. However, in later years, it usually costs less than the same comparable Term Life Insurance policy.
Universal Life Insurance has an initial payment, followed by flexible premium payment frequency and amounts. Premiums are placed into an account that earns interest, and policy charges are deducted from this account. If the charges exceed premiums paid, the death benefit can be decreased or even end without an increase in premiums. The cash value is dependent upon premium investments. Universal Life Insurance is generally less expensive than Whole Life Insurance because of premium flexibility - but the varying face amount and cash value can make it a less popular choice for some people.
Fixed-Indexed Universal Life Insurance is a variant of Universal Life Insurance that gives the security of Universal Life while offering an even greater potential for returns. Because the cash value is guaranteed to stay at or above a certain point, your investment can grow without the risk associated with directly investing in the stock market.
Please Contact Stellar Insurance Services to get quotes or more information.
1 - NFDA.org