Term life insurance is typically less expensive than permanent life insurance because the policy does not accumulate a cash value and the policy does not need to cover your entire life; so it is less likely to have to pay off.
Term life insurance is commonly used by young individuals & parents to provide money to surviving family members to pay off consumer debt, provide for your family’s day to day needs by replacing lost income for a period of time, pay for your children’s education, cover funeral costs and pay off your mortgage.
Carpenter Insurance has licensed Term Life Insurance experts that work with you to figure the right amount of insurance for your needs then secure the lowest possible price from the 20 plus Term Life Insurance Companies we represent.
Term Life Insurance Coverage Options*
Guaranteed Level Term Life Insurance – This is the most common type of term life insurance. It is popular because of the extremely low cost and long term coverage it provides. These types of life insurance policies have premiums that are designed to remain level for a period of 5, 10, 15, 20, 25 or even 30 years.
Decreasing Term Life Insurance – Similar to level term with guaranteed level premiums for the term of the insurance. The difference is the death benefit decreases over the term. Decreasing term is commonly sold as mortgage insurance as the decreasing death benefit mirrors the reducing mortgage debt. The terms are usually 10,15 & 30 years. We don’t recommend decreasing term for mortgage insurance as the costs savings are negligible compared to the benefit of having the larger death benefit throughout the term. This additional money may be very valuable to your family in the event of your death.
Return of Premium Term Life Insurance (ROP) – Offers a guaranteed refund of the life insurance premiums at the end of the term period, assuming the insured is still living. This type of term life insurance policy is a bit more expensive than traditional term life insurance, but the premiums are designed to remain level. They are often significantly less expensive than permanent types of life insurance, yet, like many permanent policies, they still may offer cash surrender values if the insured doesn’t die. Return of premium term life insurance policies are available in 15, 20, or 30-year terms.
Optional Term Life Insurance Riders*
Child Term Rider – Insuring your child is by far one of the easiest and most affordable ways to establish their financial foundation and future insurability while they’re still young and healthy, and it’s easy to do by attaching their policy to yours.
Accidental Death Benefit – Accidents happen anywhere, at any age. The accidental death benefit rider provides additional coverage if you we re to die “accidentally.” It may even double the amount of the original death benefit. Having this rider attached to your life insurance policy can give your family greater peace of mind in the event of your death due to an accident.
Accidental Death and Dismemberment Rider (AD&D) – The AD&D Rider usually provides that the accidental death benefit will also be paid if the insured loses sight in both eyes or suffers the loss of any two limbs. Sometimes a smaller amount may be paid for the loss of sight in one eye or the loss of one limb.
Accelerated Death Benefit – If you’re diagnosed with a terminal illness while your life insurance policy is still in force, this rider gives you the option to collect all or part of the death benefit while you’re still alive. This may take away some of the financial burden of paying unprecedented medical expenses.
Disability Income Rider – Guarantees a specified level of income for either as long as the disability lasts or a time frame specified in the rider for the policyowner specified.
Guaranteed Insurability Rider – Allows the policyowner to purchase additional coverage at certain stated intervals (either age or policy year options) without requiring further evidence of insurability. This coverage could be very significant when an insured has become uninsurable sometime after the initial policy was issued and would be otherwise unable to obtain additional coverage.
*See specific policies for coverage, limitations & exclusions
Deciding on how much life insurance you need is based on several variables, and differs for each individual. Our licensed life insurance experts are available to work with you to figure out how much term life insurance is right for your situation and then work with the 20 plus life insurance companies we represent to get you the absolute best coverage at the best price.
Below is a step by step guide to helping you decide how much term life insurance you need.
Remember, if you are married, you should do this calculation for both you and your spouse. Even if you spouse is not an income earner, life insurance is important to cover burial costs, probate costs and child care costs.
Term Life Insurance Calculator:
Here is a simple tool to get a general idea of how much term life insurance you need. Be sure to discuss your needs with one of our licensed term life insurance experts before buying any life insurance.
- Income Replacement – Start by taking your expected annual income and multiply it by the # of years you want to provide for your family in the event of your death. We recommend no less than 5 years.
- Pay Off Debt – Total any debt you want to pay off like your mortgage, car, credit cards, etc. Be sure to include burial expenses, probate & legal fees here and add the total to the total from line #1.
- Children’s Education – Add to your total the costs to send your kids to college. Be sure to take into account the cost of college when your kids are old enough, not the cost today. A good rule of thumb is that the cost of going to college doubles every 15 years. So if your kids are young, double the current costs, if your kids are middle school age, add 50% and if your kids are high school age, add 25%. Keep in mind, all schools are the not the same costs. Add this total to your total.
- Other Life Insurance – Subtract any permanent life insurance you currently have. We don’t recommend including life insurance through work in this total because if you change jobs, your next job won’t have the same insurance. Subtract this total from line #3’s total.
So the formula is Income Replacement + Debts + Children’s Education – Existing Permanent Life Insurance = Total Term Life Needed.
The length of the term (# of years) should be until your youngest child graduates college. This ensures that your family is provided for and any benefits above what is needed for income, debts & education can be used by your spouse to start over or by your children to get a start on their financial futures. Life insurance typically passes to your beneficiary tax free and does not go through probate.
Complete the form below to request a quote, or for faster service, call us
Monday – Friday from 8:00 AM – 5:00 PM at (850) 939-7777