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Term Life Insurance Rates

TERM LIFE INSURANCE RATES

Sample Rates As Of April 25, 2014

$500,000 TERM POLICY FOR 20 YEARS

FOR A 65 YEARS OLD MALE; NON-SMOKING; BEST HEALTH CLASS

1.   $4,870.00 per year with Transamerica Life Insurance Company 
Trendsetter Super 20    Pfd Plus Non-Smoker
Monthly: $426.13
2.   $4,945.00 per year with Ohio National Life Assurance Corporation
FlexTerm Series IX – 20 Year    Super Preferred Non-Smoker
Monthly: $426.29
3.   $4,955.00 per year with Ohio National Life Assurance Corporation
FlexTerm Series IX – 20 Year Plus    Super Preferred Non-Smoker
Monthly: $427.74
4.   $4,955.16 per year with Protective Life Insurance Company 
Custom Choice UL – 20 Year No Lapse    Select Preferred Non-Tobacco
Monthly: $428.61
5.   $4,989.00 per year with American General Life Insurance Company 
Select-a-Term – 20 Year    Preferred Plus Non-Tobacco
Monthly: $431.31

 

$500,000 TERM POLICY FOR 20 YEARS

FOR A 65 YEARS OLD FEMALE; NON-SMOKING; BEST HEALTH CLASS

 

1.   $3,040.00 per year with Ohio National Life Assurance Corporation
FlexTerm Series IX – 20 Year    Super Preferred Non-Smoker
Monthly: $262.96
2.   $3,085.00 per year with Guardian Life Insurance Co of America 
Level Term Gold 20    Elite
Monthly: $264.79
3.   $3,125.00 per year with Ohio National Life Assurance Corporation
FlexTerm Series IX – 20 Year Plus    Super Preferred Non-Smoker
Monthly: $269.15
4.   $3,128.65 per year with Protective Life Insurance Company 
Custom Choice UL – 20 Year No Lapse    Select Preferred Non-Tobacco
Monthly: $270.31
5.   $3,155.00 per year with Banner Life Insurance Company 
OPTerm 20 – 20 Year Term    Pfd Plus Non-Smoker
Monthly: $276.06

For rates specific to your own situation, click INSURANCE GLOBE and enter your data in the Quote Engine.

For customized rates click on FREE CONSULATION.

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How Much Life Insurance Do I Need?

How Much Life Insurance Do I Need?

If you are looking for life insurance and are asking yourself “how much life insurance do I need, you are not alone.

When it comes to identifying and measuring death benefit needs, there is no single formula that is “just right” for all circumstances, nor is there a “correct” amount.

When looking to purchase life insurance, people tend to be motivated by reasons (valid, for not all inclusive) such as:

  • Their spouse has been saying for a while that they need to buy life insurance.
  • They are trying to replace the income of the main breadwinner (Income Replacement).
  • They got married and buying life insurance is a prudent thing to do.
  • They got divorced and have been ordered by the court to purchase life insurance
  • The first child is born and buying life insurance is the responsible thing a parent should do.
  • They bought a home and they buy life insurance to cover the outstanding balance of the mortgage.
  • They want to leave something to the surviving spouse.

Looking at the Statistics

According to a recent study done by LIMRA (an association that provides research, consulting and other services to insurance and financial services companies, worldwide), households in the United States only have, on the average, enough life insurance to replace 3.5 years of income.  Would that be enough for your family if you were no longer there? Would 3.5 years be enough time for your family to get back on their feet?

Consider a husband and wife who have a child. Their budget is predicated on both of their incomes. Together, they contribute monthly to pay for:

  • the mortgagehow much life insurance do I need?
  • utilities
  • living expenses (such as transportation, food)
  • childcare and education
  • Life style/entertainment
  • Reserve fund for emergencies
  • Retirement Savings

If one of the parents dies, the concern about being able to cover monthly bills becomes a serious matter. If the primary breadwinner dies, the situation is then amplified. If they had life insurance to cover 3.5 years of their income, would that give the remaining spouse enough time to recover? When the life insurance money runs out and the situation is not better, what happens then? The result is the spouse and child (or children) will have to significantly reduce their standard of living.

How Much Life Insurance Do I Need? It Depends!

  • A multiple of the annual salary may be a good rule of thumb for a working person with not very complex personal circumstances.
  • For those seeking to pay off debt, then a death benefit equal to the total debt should be enough to pay off loans and credit card balances and other debts and liabilities.
  • A benefit of $10,000 may be appropriate coverage for funeral and burial expenses, but these costs will vary by geographical region and according to the personal wishes of the insured or the family of the insured.
  • The amount needed to fund a college education will vary greatly. An “ivy league” school is much more costly than a state college or university.
  • A much larger death benefit may be needed to provide liquidity for business, tax, or estate planning needs of the client.
  • There are a number of valuable tools available to help determine the amount of death benefit needed to raise young children or provide for a surviving spouse’s retirement.

Doing a “Needs Analysis” Helps Determine “How Much Life Insurance Do I Need?”

A Needs Analysis can assist you in making sure you obtain the proper life insurance coverage.  For this you can use an illustration software. Your insurance agent I am sure, can offer one. Or you click on LIFE INSURANCE NEEDS ANALYSIS SOFTWARE (which will take you to a life insurance need calculator) and navigate through the process yourself, which may be a good idea before meeting with your advisor.  Any method selected to do a Needs Analysis, needs to include the following:

  • Cash Needs Upon Death
  • Income Needs for the surviving familyhow much life insurance do I need?
  • Available financial resources
  • Assumed interest rate of return

Once the Needs Analysis is completed, you should have a more exact understanding of how much life insurance you should have, based upon your particular needs. I Needs Analysis will probably show that a large amount of life insurance will be needed in order to replace your income. “Large” in this sense, is a relative term and it, more or less, means, that  a person doing an income replacement analysis, more likely than not, will feel that the recommended face amount of life insurance to be purchased is a large amount.

More on Income Replacement

What Income Replacement actually means is that upon the death of an individual the life insurance proceeds should be large enough so that if invested around the time of death of the insured, the life insurance proceeds so invested will generate an amount of annual interest equal to the annual earnings of the insured. For instance, if the insured made $50,000 a year (from all sources) then one will need to calculate the amount to be invested in order to generate $50,000 a year in earnings. In this situation, the investments selected should be limited to products that do not fluctuate with the market. Generally, these are fixed income instruments, such as bonds, certificates of deposit and, possibly, life insurance annuities.

While bonds do fluctuate in value as interest rates change in the market, the fluctuation is generally less than how equities (stocks) fluctuate in value. And, besides, while a bond can fluctuate in value, if you hold it to maturity you will (unless the issuer of the bond ran into financial difficulties) get all your money back. Consequently, the two investment options we are going to talk about in here are going to be investment options that are considered safe. One will be U. S. Government Securities and the other Certificates of Deposit.

U. S. Government Securities how much life insurance do I need?

As of the writing of this article, in early 2015, the 30-year U. S. Treasury Bond rate (not yield), according to Fidelity Investments, is 3.00%. However, if you have to purchase this bond above par, then your realized interest (yield) will be less than the face amount.  Assuming you can purchase the bond at par and receive the 3% interest, a $100,000 U. S. Treasury Bond will pay you $3,000.00 a year for 30 years, if you buy said bond today. Therefore, to calculate how much is needed to invest in U. S. Treasury Bonds paying 3.00% annually (for 30 years) in order to generate $50,000 annually, we would have to divide $50,000 by $3,000, and then multiply the results by $100,000.  The calculations show that approximately $1,666,666 would have to be invested in said U. S. Treasury Bond paying 3.00% in annual interest in order to generate about $50,000 a year in revenue to replace the insured’s annual earnings of $50,000. Therefore, a life insurance policy with a face amount of approximately $1,700,000.00, will need to be purchased.

Certificates of Deposit

According to bankrate.com a 5-year jumbo ($100,000, or more) CD for 5 years is paying 2.37% annually, or $2,370 a year on a $100,000 Cd. Therefore following the same logic as above, to calculate the face amount of a CD paying 2.37% a year that would need to be purchased in order to generate $50,000 in annual interest (to replace the annual income of the insured in our example) we need to divide $50,000 by $2,370 and then multiply the results by$100,000. The calculations show that a CD with a face amount of $2,109,704.60 will need to be purchased.

A Needs Analysis is the Way to Go! 

Because of all of the above, it is important to do a Needs Analysis before buying life insurance. A Needs Analysis can help you make sure that you obtain the right amount of life insurance coverage taking into account all financial matters of importance to you. There are software applications available that ask the right questions about your personal finances so that when you make a decision as to the face amount of the policy you need, it is the right amount. The right issues to consider include, but are not limited to,  a) cash needs upon death; b) income needs for the surviving family; c) available financial resources; d) assumed interest rate of return; etc.

A properly completed Needs Analysis can illustrate that a large face amount of life insurance is important when thinking about replacing one’s income. It will also help you identify the type of policy you should buy, whether TERM INSURANCE, or UNIVERSAL LIFE INSURANCE, or WHOLE LIFE INSURANCE, or a combination thereof.how much life insurance do I need?

Call us at our Toll Free Number 888-950-8376 so that we can assist you do a proper and complete Needs Analysis. Or, click on CONTACT US.

ll Free Number 888-950-8376 so that we can assist you do a proper and complete Needs Analysis. Or, click on CONTACT US.