There are a lot of term life insurance plans in Utah to choose from. So, how do you know what term is right for you? Let’s break down the term life insurance plans in Utah and see which one fits your needs.
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Term life insurance is pretty easy to understand once you take a second to learn about. In a nutshell, term life insurance is life insurance that covers you for a term of time. Because it only covers you for a term of time, it’s also usually the cheapest type of life insurance.
Most popular terms life insurance plans
Everybody’s situation is different and there is no one size fits all term life insurance policy. I’ve been doing this a long time and most people go with either a 15, 20, or 30 year term life insurance policy. The 10 year is also popular for people in their 70s because most of the longer term policies aren’t available to them. The right term life insurance policy is going to depend on what your needs are.
20-year term policy
I think the 20-year policy is the most popular term policy in Utah. The 20-year term policy is very popular because 20 years from now seems like an eternity. Most people’s kids will be grown and gone in 20 years so that’s one need that goes away.
You can accomplish a lot in 20 years, so by having a 20-year policy gives you the time to get your financial house in order so that maybe you don’t need life insurance after the 20 years is up.
The 20-year term policy’s price is probably the best bang for your buck. It’s not that much more than a 15-year policy in most cases and usually much cheaper than a 30-year policy.
15-year term policy
Make sure to price it out, but most of the time the 15-year policy isn’t that much cheaper than a 20-year policy.
30-year term policy
A lot of people take out 30-year term life insurance policies mainly for one reason, to cover a 30-year mortgage. The most common mortgage these days is the standard 30-year, so the 30-year term policy gives people the peace of mind that the mortgage will be covered heaven forbid something happens.
A lot of people like to do a 30-year policy because they like the fact that the price is locked in for the whole 30 years. If you are in your late 30’s for example, a 30-year policy will take you all the way to your late 60’s when hopefully you’re retired and living St. Thomas!
10-year term policy
10 years can blow by in a heartbeat, so unless you have a really temporary need for life insurance, a 10-year term is probably not going to work for you. For a lot of people in their 70s, especially late 70s, a 10-year policy is one of their only options when it comes to term insurance.
When I was first married, I bought a 10-year policy because I was in my early twenties and I thought 10 years was so far down the road. It didn’t take me long to realize that I needed a policy to last me a lot longer than 10 years. So don’t buy a 10-year term policy just because it’s the cheapest option.
Annual Renewable Term (ART)
Just like it sounds, annual renewable term (ART) insurance renews annually but your price also goes up every year. There just aren’t a lot of situations where ART makes sense. Especially because the other options are usually a lot cheaper anyways.
25-year, 35-year, and 40-year
These are the odd balls in the term life insurance world. There could be a need for them in certain situations, but they’re not too popular. Obviously the longer the term, the more expensive the insurance is going to cost, so you just have to weigh your options.
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Riders (add-ons) for term life insurance
Almost all companies offer some sort of rider that you can add on to your term life policy. Here are some of the more popular ones:
Childrens Term Rider.
For about $5/month, you can add a children term rider that covers all your kids heaven forbid something happened to them. For example, $5/month would cover all your kids for about $10k in coverage. You can get more with most companies, for more premium of course.
Return of Premium Rider
This is a rider that you pay extra for (usually twice the cost) that gives you back all the premiums you paid into if you out live your term. For example, if you had a 20-year term policy with the ROP rider, and you paid into the policy $5,000 over those 20-years, you would get that $5,000 back.
Conversion Rider
Most term life policies give you the options to covert your term policy into a permanent policy without providing any health history. Most plans will have a maximum age that you can do this (65 is common). This does not cost any extra.
Accelerated Death Benefit
Most term policies have a provision that gives you the right to take a portion of your death benefit (usually up to 75%) before you die. You can only do this if you are diagnosed with a terminal, chronic, or critical condition (according to the policy).
There are a lot of term life insurance plans in Utah. Hopefully this gives you an idea to help you with you decision on what policy will best fit your needs. We are here to walk you through the process and help you with your life insurance needs. Don’t hesitate to call, text, or email anytime.