Tag: term life

Shopping Life Insurance? Dave Ramsey Says Avoid This Option

Ana R. Cheatwood
insta_photos / iStock.com

insta_photos / iStock.com

Unless you’re independently wealthy, the best way to ensure the financial security of your family in the event of your death is to buy a life insurance policy. The question is which kind of policy to buy. You typically have two main choices: term life insurance and whole life insurance. Both have their pros and cons, but in almost all cases financial experts recommend term life over whole life — and it’s not even close.

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According to a recent post on the website of financial guru Dave Ramsey, it’s “far better” to get term life than whole life.”

“We don’t want you to get ripped off, we do want to see your family well protected, and we for sure want your financial future to include wealth and the chance to become self-insured,” the post said. “The only kind of policy that lets you hit all those goals is term life. But whole life misses the mark in every department.”

Ramsey isn’t the only one who feels that way. Many other financial experts say that with few exceptions, term life is better than whole life because of the amount of money involved.

In case you need a primer: Term life insurance insures you for a specific amount of time, such as 20 years. When that term is up, the life insurance policy ends. If you die during the specified term, then your family is covered and will receive either a one-time payment, annuity or monthly payment.

Whole life insurance, also known as cash value insurance, refers to coverage that lasts your whole life, no matter how long. These kinds of policies work

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When Should You Get Life Insurance?

Ana R. Cheatwood

If you’re lucky enough to receive a life insurance benefit from your employer, you might consider the matter settled. But that policy probably isn’t enough to adequately cover your needs as defined by most insurance industry experts.

“Any life insurance is better than no life insurance policy,” says Seattle-based certified financial planner and president of CEG Life Insurance Services Daniel Adams. “But having said that, if you can qualify elsewhere and you don’t have other health problems or concerns, it’s rarely going to be enough.”

Employer-provided policies usually provide you coverage equaling one year of your salary, according to financial services company Securian. But this may not be enough to help your financial dependents maintain their lifestyle after you’re gone.

While some experts suggest 10 times your salary as a rule of thumb for how much life insurance you need, Adams suggests calculating your own ideal coverage. “How much, if you were to pass away, does your family need on an annual basis, and for how long?” he says. “That’s just a simple math equation.”

Here are several situations where you should consider looking beyond your office for a life insurance plan.

You’re early in your career

Younger people tend to think they don’t need life insurance, but buying a policy early in life is a financially smart move to make.

That’s because (in general) the younger you are, the cheaper your life insurance premiums. “If you’re at a young age and [have] a healthy lifestyle, it’s much cheaper than even if you wait a few years,” Adams says. “Those prices are going to go up dramatically.”

According to data from insurance comparison site Policygenius, the typical 25-year-old male will pay $39.48 a month for a $500,000, 30-year term policy, while the typical 35-year-old will pay $46.42 for the

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How much does life insurance cost per month?

Ana R. Cheatwood
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Life insurance costs vary based on a series of personal factors.

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Everyone eventually passes away, but if you have life insurance, your passing might be somewhat easier for your family to handle from a financial perspective.

If you pass away at a relatively young age, for example, your spouse, kids or other loved ones might struggle without the help of your income to pay the bills. But a life insurance payout can help fill that gap.

If you’re in the market for life insurance then start by getting a free price estimate so you know exactly what to expect.

How much does life insurance cost per month?

Depending on factors such as your age, gender, smoking history and more, life insurance monthly costs can vary significantly. Life insurance costs also vary quite a bit based on the type of policy you’re looking for.

Life insurance premiums for whole life insurance policies, for example, which can provide lifelong coverage, tend to cost significantly more than term life insurance policies that have expiration dates. 

If you outlive a term policy, you generally wouldn’t collect anything, though there are some exceptions like if you developed a critical illness during the term and had a critical illness rider for the policy. With whole life insurance and other types of permanent life insurance policies, you pay more each month but can also get benefits like building up a cash value for your policy.

Because whole life insurance policy decisions can be tied to investment considerations (i.e., you might be more comfortable building up assets via a whole life insurance policy vs. investing on your own), here we’ll take a closer look at term life insurance policy costs to give you a better sense of what the core life insurance benefit

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How Much Can I Borrow From My Life Insurance Policy?

Ana R. Cheatwood

Borrowing from your life insurance policy can be a convenient way to access funds if you need to cover a big expense. Only whole or permanent life insurance policies can be borrowed from; term life insurance policies don’t have a cash value that you can borrow against. We’ll cover how borrowing money from a whole life insurance policy works, how much you can borrow, and what you should consider when borrowing funds from a life insurance policy.

Can you borrow against your life insurance policy?

You can borrow against your life insurance policy only if you have a whole or permanent life insurance policy. This type of policy doesn’t have a fixed term limit, and provides coverage for your entire life as long as you continue to pay your monthly premiums. Whole life insurance policies also accumulate a cash value over time, which earns interest and can be borrowed against while you’re still living. You can borrow from a whole life insurance policy as long as the cash value of the policy is equal to or greater than the amount you intend to withdraw.

It’s not possible to borrow money from a term life insurance policy. This type of life insurance policy is typically more affordable, and covers individuals for a set term length, usually of 10, 20, or 30 years. After the term length is over, the policy expires and individuals must purchase a new policy. Term life insurance doesn’t accumulate a cash value over time.

How much can you borrow from your life insurance policy?

The rules for borrowing from a whole life insurance policy vary from insurer to insurer, but a good general rule of thumb is that you can borrow up to 90% of the cash value of your insurance policy. There’s usually no minimum loan

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Life insurance benefits you didn’t know about

Ana R. Cheatwood
gettyimages-1145371340.jpg
Whole life insurance policies come with a cash reserve that you can access while you’re alive.

Getty Images/iStockphoto


Most people know the general parameters of how life insurance works and who it helps. In exchange for a monthly premium (often discounted if paid annually) to a provider, the insured secures a financial safety net for their loved ones in the event of their death. Coverage amounts range significantly from tens of thousands of dollars to more than $1 million. 

The advantages of life insurance are typically clear and the costs for millions of Americans are often negligible. You may already even have a plan provided to you as part of your employer-provided health benefits package. 

But there are some perks of life insurance that you may not have known about. Buried in the fine print of an application, there are multiple ways to utilize a life insurance plan besides just letting it sit idle for times of emergency. These benefits can help you both while you’re alive and in the event of your death.

If you don’t have life insurance currently then start by getting a free price quote so you know exactly what to expect.

Life insurance benefits you didn’t know about

Here are three life insurance benefits you may not have known.

You can get your premiums returned

Most policyholders are used to paying for insurance protections that they never wind up needing. But the money you use to pay your life insurance premium doesn’t necessarily need to go to waste. By adding a “return of premium” rider to your policy you can have the payments you made returned back to you if you wind up outliving your pre-determined term. 

This rider – which comes with an extra cost – may be particularly helpful for applicants

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Types of Life Insurance – nj.com

Ana R. Cheatwood

When you buy life insurance, there are two main options: term and permanent life insurance. Term life insurance lasts for a set number of years, while permanent life insurance lasts a lifetime. The type of life insurance policy and the coverage amount that’s best for you will depend on your personal financial situation and needs. Knowing the different types of life insurance can help you make the right decision for your coverage needs.

Term life insurance

Term life insurance offers temporary coverage for a specific timeframe, usually 5 to 30 years. Premiums typically stay level for the entire coverage period, unless you buy decreasing or increasing term life insurance. This policy is sometimes called pure life insurance because it doesn’t provide cash value. As long as premiums are paid and the policy stays in force, your beneficiary will receive the death benefit when you die.

Depending on the company and policy details, you may be able to renew term life insurance yearly until a certain age. There might also be a conversion option before the policy expires, which allows you to convert the policy to a permanent life insurance policy. The company may require a medical exam and rates will depend on your age and health. Fabric term coverage is offered in 10, 15 and 20 year terms, and Fabric says the average 29-year-old woman in excellent health pays just $14.61 per month for $250,000 in life insurance.

Whole life insurance

One permanent life insurance option is whole life insurance. It comes with a guaranteed death benefit, level premiums and a cash value savings account. Unlike term life insurance, whole life lasts a lifetime. The policy may require payments until you reach age 100 or 120. Some policies have limited pay options, which allow you to pay higher premiums for

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Best Life Insurance Companies of 2023

Ana R. Cheatwood

Family of four outside gardening in their yard

Family of four outside gardening in their yard

Life insurance can provide the peace of mind that comes from knowing your family will be taken care of when you’re no longer there to support them.Despite the misconception that the best life insurance is inaccessible to most of us, policies can actually be quite affordable. For example, a healthy 35-year-old female could potentially qualify for a 20-year term life insurance policy with a face value of $250,000. The premium? Around $18 a month.Choosing between the best life insurance companies can be a bit overwhelming. This story simplifies the process. Read on to discover the life insurance companies we recommend, and why. There’s also more about what life insurance is and how it works.

Our Top Picks for Best Life Insurance Companies

Best Life Insurance Companies Reviews

Why we chose it: Bestow has a quick and easy online application process. It also offers a high maximum death benefit — which is not always the case for no-exam policies. Since there’s no need for a medical exam in the underwriting process, you’ll save the time and potential cost of a doctor’s visit.

  • No medical exam needed, yet a death benefit of up to $1.5 million
  • Complete the application online
  • Terms between 10 to 30 years
  • No insurance riders
  • Only offers term life insurance
  • Doesn’t accept applicants over the age of 59
  • Unavailable in certain states

Highlights

  • Term Coverage: 10-, 15-, 20-, 30-year
  • Death Benefit: $50,000 – $1.5 million
  • AM Best Rating: Partner issuers hold an A+ rating

Keep in mind that Bestow only offers term life insurance — a policy that has a specific end date — instead of permanent life insurance. However, its maximum death benefit is much more generous compared to its no-exam competitors. If approved, you could potentially receive coverage

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AmeriSave Mortgage Partners With Ladder to Provide Customers With Affordable, Flexible Life Insurance Coverage

Ana R. Cheatwood

Life insurance is the latest addition to AmeriSave’s growing product offering

ATLANTA, January 25, 2023–(BUSINESS WIRE)–AmeriSave Mortgage Corporation, one of the nation’s leading online home mortgage lenders, has launched a new partnership with Ladder, the leader in digital life insurance, aimed at helping customers protect their homes and family with affordable and flexible life insurance coverage.

The new partnership with Ladder enables AmeriSave customers to easily apply online for term life insurance with approvals in minutes and no medical exams required for coverage up to $3 million (just some health-related online application questions). Life insurance can help protect the financial security of family members in the unfortunate event of losing a primary income earner.

“A home is usually a family’s most important asset, so protection is critical,” said Mike Izakov, Head of Financial Institution Partnerships at Ladder. “By embedding straightforward, affordable and flexible life insurance into their borrower journey, AmeriSave is making it seamless for their customers to protect their loved ones, helping ensure that families can maintain their sense of community and lifestyle during difficult times.”

While coverage premium rates can vary depending on the policyholder’s age and a variety of other factors, the price of $500,000 of coverage through AmeriSave and Ladder starts at just $18 per month.*

“At AmeriSave, we’re dedicated to helping our customers save money, whether that’s through low-rate mortgages, with high-quality homeowner’s insurance, by helping reduce energy costs through solar power or now, with top-of-the-line term life insurance,” said Mike Berte, president and chief operating officer of AmeriSave Mortgage Corporation.

“A home is the biggest investment that most consumers will ever make, which is why it’s a wise choice for borrowers to protect that investment with life insurance,” said Doug Reynolds, president of AmeriSave Insurance, a division

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How Much Life Insurance Does a 50-Year-Old Need?

Ana R. Cheatwood
Mature man looking at his laptop with concern on his face.

Image source: Getty Images

The DIME formula can help you determine the right amount of life insurance coverage.

Key points

  • To figure out how much life insurance you need, consider your individual needs and circumstances.
  • It is also important to consider other factors such as lifestyle and future goals when making this decision.
  • The DIME formula is a good way to estimate insurance needs.

When it comes to life insurance, there’s no one-size-fits-all approach. Every individual has different needs and different reasons for getting a policy. This is especially true for those aged 50 and older, as the amount of coverage they may need can vary greatly depending on their lifestyle and financial situation. So how much life insurance does a 50-year-old need? Let’s look at the factors to consider when selecting your life insurance policy.

Determine your needs

Before you can determine the optimal level of coverage for your life insurance policy, you need to figure out what it is you need from a policy in the first place. Do you plan to leave money behind for your loved ones after you die? Are there any debts that will be left unpaid should something happen to you? Will your spouse or partner still need income if you are no longer around? These are all questions that should be considered when deciding how much coverage you should get.

It is also important to consider other factors when deciding how much life insurance a 50-year-old should have. These include your current lifestyle, future goals such as retirement planning or starting a business, and whether you want to leave a legacy behind.

One rule of thumb is to multiply your annual income by 10 and add it to all your debts. If someone has debts equaling $250,000 and a salary of

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3 Reasons $2 Million of Life Insurance Is Ideal for My Family

Ana R. Cheatwood

Insider’s experts choose the best products and services to help make smart decisions with your money (here’s how). In some cases, we receive a commission from our partners, however, our opinions are our own. Terms apply to offers listed on this page.

  • My husband and I are in our mid-30s and have term life insurance policies worth $2 million.
  • They cost us a total of $100 a month, which I think is a worthy spend for peace of mind.
  • Our policies would cover the cost of childcare and my husband’s salary if either of us died.

With more than $2 million in life insurance policies, some might think my husband and I, otherwise healthy 36- and 37-year-olds, are over insured.

But the amount of life insurance we opted for wasn’t just a free-for-all. It was a strategic move, based on our children’s ages, childcare situation, and debt. 

 

 

My husband has roughly $1.6 million in life insurance, both via his work policy and an independent one. While a big portion of the cost is covered by his employer, we pay about $75 a month for both of his policies. 

My policy is for $750,000 and costs us $25 a month. Both his and my policies are term life insurance, though we will eventually upgrade to a whole life policy. While our total monthly life insurance cost is $100, to me, it’s a worthy spend. 

3 reasons our life insurance works for us

1. It covers childcare

While I’ve been running my own freelance editing and writing business for the better part of five years, I’m also the primary caregiver for our two children, ages 2

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