When considering life insurance, one of the first questions to ask yourself is: How much do I need? The answer is different for everyone, which is why getting the right human guidance from a qualified professional is so important. If you have a family or loved ones who depend on you financially, it’s important that you have life insurance protection. You can start by getting some general term life insurance quotes, but how much life insurance you need and what kind of policy you purchase should be determined by the details of your situation. There is a general suggestion—that the amount of life insurance coverage should be between six and 10 times your annual salary—but the actual amount can vary significantly depending on your unique situation. Here are some starting points to help you understand the term life insurance definition and the type of rates for term life insurance you’ll encounter as you get started.
Most people start with term life insurance.
What is term life insurance? This type of insurance is for a set period of time, often 10 or 20 years, and is relatively budget friendly compared to a permanent insurance in the same coverage amount. It’s also more common for younger, first-time policy owners. A New York Life financial professional will help you calculate your financial obligations to your family and how that relates to your resources and income. This will show you the range of coverage you need and the rates for term life insurance coverage. Many term policy owners match the length of their term coverage with a key life milestone—like paying off a mortgage or seeing their children through college.
The cost of life insurance should fit your budget.
Your term life insurance coverage can be designed to match your budget. If you’re young and healthy, your premium is generally lower. Some term products allow you to start off with an even lower premium if you opt for coverage rates that increase each year.
You can convert to permanent coverage when you are ready.
An alternative to term coverage is whole life insurance. Whole life is more expensive, but it is permanent coverage that lasts the rest of your life, as long as you pay the premiums. Whole life also accumulates cash value and is generally eligible to receive dividends. (Dividends are not guaranteed, but New York Life has paid dividends on its whole life policies every year since 1854.) Like term, the rate of your whole life insurance premium depends on your age and physical health when you first purchase the policy. New York Life term policies include opportunities for you to convert to whole life coverage—and without another medical exam.1 Many New York Life clients convert some or all of their term coverage to whole life as their careers develop and their salaries increase. If you would prefer coverage for life, it may be worth locking in a lower premium for whole life protection at as young an age as possible.
Customize your life insurance policy to fit your needs.
Term life provides you with protection now and gives you options for changing your coverage as your life changes. To figure out the options and features that best fit your lifestyle, and to understand more about the rates for term life insurance coverage you need, connect with a New York Life financial professional. Speaking with a professional will give you a better understanding of the details of term coverage and provide you with the peace of mind you get from knowing that you and your loved ones will be financially protected.
1 Subject to certain conditions and limitations.