Group Term Life Insurance Solutions for [Association Name] Members
Is Group Term Life Insurance right for you?
Most people envision fantastic futures for themselves and their family. But whether you’re sending children to college, purchasing a new home or starting a business, your income is the engine that turns your aspirations into reality. What if you were to die? How would this affect your family's plans?
Life insurance has proven to be one of the most cost-effective ways to safeguard the dreams of many generations of families. While you could never be replaced, life insurance can help your family handle financial pressure resulting from a loss of income due to premature death. Usually passing to your beneficiaries free from federal income tax, life insurance proceeds can help preserve your family's standard of living, cover outstanding debts, and keep their aspirations alive.
Term life insurance offers effective protection for times when people need it the most.
Why is term so popular?
Term insurance is perhaps the most popular form of life insurance–and for good reason. It can provide affordable protection, often with a guaranteed premium for a set period of time. If you die while the coverage is in force, the face amount is paid to your named beneficiary. At the end of the premium guarantee period, you can continue coverage at a premium that’s higher, and can increase each year–but which starts lower than a comparable permanent insurance plan.
This initially lower premium makes term insurance a perfect choice when you have a temporary need for life insurance protection–such as paying off a mortgage, or paying for expenses like childcare, elder care, college tuition or credit card debt.
Unlike permanent insurance, term does not accumulate cash value and in most instances does not earn dividends. This is one way the cost is kept lower than permanent insurance. There are two basic group term life insurance types: annually renewable term (ART), which renews each year at a scheduled premium; and level premium term, which features a fixed premium for a specific number of years and then increases in subsequent years.
When is term appropriate?
Term insurance may be suitable for people in several situations. Here are just three examples:
- Temporary need for protection. People often use term insurance when taking out loans. For example, term coverage in the amount of the loan could assure the loan debt is repaid if the insured dies. Or a business owner who borrows money–perhaps to enlarge his or her operation–could purchase term coverage in the loan amount. Homeowners frequently choose term to protect their mortgage over the life of the loan. And parents use term to help cover their children’s college educations if something happens to the parents before graduation. In short, whenever life insurance is needed for a specific period of time, term presents a solution.
- Budget-minded choices. In situations where life insurance is essential but dollars scarce, term could serve as a stopgap. Individuals fresh out of college and starting careers may consider term coverage if they have student loans to pay off. If they die before their loans are repaid, that obligation could fall to their estate. Term insurance safeguards against that. What’s more, once they’ve achieved some level of success–and have sufficient funds–they can expand their coverage to help protect the new people and circumstances in their lives, often without additional medical exams or questions.
- As a supplement to a full financial portfolio. An excellent way to use term insurance is as a piece of a larger financial plan. Let's say an individual wants to leave a sufficient enough legacy to provide for his children and grandchildren. Will savings left be enough? What if medical needs draw down those funds? Life insurance can be a part of an overall strategy to leave a lasting source of funds.
What to look for in a term plan
Check out the plan features. When hunting for term insurance, look closely at the plan. For one, make sure it’s guaranteed renewable–that is, you can renew your coverage without undergoing a physical exam. You’ll also want to understand the rate classes, because they will impact your cost.
Cost isn’t everything. Most experts advise against shopping for the plan with the lowest premium. Before worrying about saving a few bucks, be sure that the insurance company is financially sound–check its longevity, size and ratings by reading what independent ratings agencies say about it. A.M. Best and Standard & Poor's are two companies that publish annual ratings of insurance companies.
A plan created with you in mind. We’ve done the research. The [Association Name] plan offered by New York Life Insurance Company was designed with you in mind. It’s for today’s dynamic professionals—people who require ways to make their financial futures more secure.
To find out more including features, costs, eligibility, renewability, limitations, and exclusions about group term life insurance contact:
This information is courtesy of New York Life Insurance Company, used with permission. It is intended exclusively for general information only.