Finding a Life Insurance Plan That's Just Your Type

Contributed by ieee financial advantage

Life insurance. Almost every family needs it. Most families — especially professional families like those of IEEE members — already have some, but many probably need more.

Although most of us don't like to spend a lot of time contemplating our own demise, we realize that buying life insurance coverage is a critical financial planning decision we have to make. Not so much because of the purchase price involved, but because of the financial security that coverage is intended to provide at some time in the future for the people we love and care about.

The first question most of us usually ask is: "How much coverage do I need?" The IEEE's Learning Center [www.ieeeinsurance.com] offers excellent calculators and worksheets to help you calculate your obligations to determine a fairly accurate figure that makes sense for your family's protection. The second question we should ask is: "What type of life insurance do I need?" The answer to that question is not so clear-cut, but it is just as important — to get the best possible protection for your family. Term life is one of the most basic types of life insurance that is typically available to you in today's insurance market. This article will take a closer look at this highly popular form of insurance for you to consider before making your next life insurance buying decision.

What is Term Life Insurance?

Term life insurance is the simplest form of life insurance. In fact, you'll often see it referred to as "pure protection," because it is designed to do only one thing: pay a death benefit.

Since your premiums buy protection only, term life provides the maximum amount of protection for every dollar you spend. So, with term life you can add larger amounts of coverage to your life insurance portfolio, or create a larger instant estate if you don't already have life insurance.

Term life coverage lasts for a specified period of time (the "term"), usually one, five, 10 or 20 years. During that term, the premiums stay the same, as determined by your age when you initially buy the policy. Some policies, especially those with longer terms, are sometimes referred to as level term insurance because the premium stays level for a set number of years. Term policies may often be renewed for more than one term, but the premium will go up to reflect your age and possibly health at the start of each new term. And most term policies have a termination age, usually somewhere between 70 and 80 years of age.

At younger ages, when the step-up in premiums at the start of each term is usually smallest, the pricing of one-year or five-year term policies is usually the most attractive. The initial cost of policies with longer terms, such as 10 or 20 years, usually starts out somewhat higher than shorter-term policies for the same amount of coverage. But in the long run, longer-term policies may offer cost advantages because the premiums are locked in at the same level for longer terms. This advantage can be especially important for buyers in their late 40s, 50s, and 60s, when premium increases at the renewal of each term tend to be greater.

A level term life insurance policy is also an excellent way to add a significant amount of protection — over and above any life insurance coverage you already have — that lasts for a specific period of time or for a specific purpose. For example, you might want to take out a 10- or 20- year level term policy to provide needed protection at a locked-in rate until your children are out of college, the mortgage is paid off, or some other event reduces your overall need for life insurance coverage. Your premium will stay the same during the term you select.

Your Source for Top Quality Coverage

In today's marketplace, life insurance plans have proliferated. At any time, you can find insurance offered not just through local agents, but through the Internet, your bank, credit card or mortgage companies, and even grocery and bulk warehouse stores. Some of these offers may appear to be exceptional deals. However, fine print and clauses may make the "great deal" only available to a small percentage of the applying population. So, being a well-informed consumer is essential.

The IEEE Group Life Insurance Program for active IEEE members includes Group Term Life Insurance, Group 10-Year Level Term Life Insurance and the Group Level Term Life Insurance to Age 65 Plans. These life insurance programs have been vetted through industry professionals and IEEE volunteer member committees. Very competitive pricing has been secured with the buying power of the entire organization and the plans are underwritten by an industry leader, New York Life Insurance Company. These policies also offer discounts for qualified non-smokers and higher volumes of insurance. Plan details, including features, costs, eligibility, renewability, limitations and exclusions, along with applications and simple price quotes, can be found at the user-friendly IEEE insurance site [www.ieeeinsurance.com] or by calling 1-800-493-IEEE (4333).

Once you have the basics down, finding the right insurance for you and your family will be an easier decision. And with the many plan options available to members, IEEE is confident one will be the right choice for you.

The IEEE Group Life Insurance Plans are underwritten by New York Life Insurance Company, 51 Madison Avenue, New York, NY 10010: under Group Policy No. G-8100-1, on Policy Form GMR-FACE/G-8100-1, with respect to Term Life and Level Term Life to Age 65; and under Group Policy No. G-29133-0, on Policy Form GMR-FACE/G-29133-0, with respect to the 10-Year Level Term Life.

For more information on the IEEE Financial Advantage Program, visit www.ieee.org/fap. Comments may be submitted to todaysengineer@ieee.org.