No one likes thinking about the end of life: it’s tough to consider leaving your loved ones behind. But, because you want to make sure your family is provided for after you’re gone, it’s important to start thinking about your Portland, Oregon life insurance early. Life insurance policies allow you to create a cash reserve, or death benefit, that will be paid to your beneficiary upon your passing. That money will be paid directly to them and can be used however they wish. The benefit may be used to pay off your home, so that your family doesn’t have to be displaced following a tragedy. It can be used to make up for lost income, to pay for education, or to take care of ongoing household or medical expenses.
Here at Peggy Romero and Associates we have a life insurance specialist to help you set up a policy that protects your family while staying within a reasonable budget. Our goal is to ensure that no matter what life’s pitfalls, you feel secure in the knowledge that your loved ones are in good hands and will be taken care of when you are gone.
Call (503) 255-7828 to discuss your needs for life insurance in Portland, OR and Washington.
What Is Life Insurance?
There are two basic policy types: term and whole. You could say, whole life insurance is like buying a house compared to term, which would be renting the house.
Term life insurance is the least expensive and often the more popular option due to cost and it’s often characterized by:
- A set amount of money paid out to your beneficiaries
- A set period of time (the “term”) during which you pay monthly premiums
- No ability to cash out or borrow against the policy
- An end to coverage at the end of the term, whether or not the policy has been used
- An option to renew the policy at the end of a term; but at a higher premium
Short term life insurance is suitable for people who have a certain goal, such as keeping the primary provider insured until the children move out, or until they are out of college. Many times longer term policies are suitable for a range of people looking for an affordable option that will cover their family for a longer period of time; such as a mortgage being paid.
Term insurance provides the best return on your premiums, but does not accumulate value in the way whole life insurance policies do.
Whole life insurance policies are generally more expensive, in the short term, but can be advantageous in terms of building up the cash reserved for your beneficiaries.
Common features include:
- An unlimited period of coverage– you’re covered until your death
- Monthly premiums that are higher than term life insurance policies
- An accumulated death benefit to be paid out to your beneficiaries
- An ability to borrow against or cash out the policy while you’re living
- No taxes on the death benefit to your beneficiaries
This type of life insurance is suitable for those with the financial ability to start planning ahead now. Although whole life insurance can be more costly to start, the cost of renewing a term life insurance policy can eventually equal what you would have paid for whole life.
Qualifying For Life Insurance in Portland, OR
Qualifying for life insurance doesn’t have to be hard. You’ll fill out an application about your medical history, traffic violations, and lifestyle choices, and underwriters will categorize your application into preferred plus, preferred, standard, and substandard. Especially if you’re young and healthy, you’ll likely qualify easily into the preferred or preferred plus insurance category.
However, if you lie on your application– say, about whether you smoke or whether you’ve gotten a DUI– the insurance company may either deny you coverage at the outset or cancel your policy once you’re discovered. The moral of the story? Tell the truth, and you’re likely to get a life insurance policy that suits your needs.
Life Insurance Costs In Oregon
Sample monthly payments chart for: 10 year term preferred elite rate class
View the complete rate sheet PDF
If you’re buying a policy as a healthy young person, you won’t pay much at all: a male in his 30s or 40s, in good health, would pay an average of $200-350 per year– so maybe $25 per month– for a term life insurance policy lasting 15-20 years and providing somewhere between $250,000 and $500,000 of coverage. However, if that same customer waited until he turned 50 or 60, costs might rise to be three or four times that amount.
For whole life policies, costs are higher: a young person might pay closer to $70 or $80 a month, but policies generally stay level for an extended period of time, which is not always the case with term life insurance. If you have to renew your term policy, you may pay a higher premium, cancelling out the initial cost savings. Again, if you’re in poor health, a smoker, or over the age of 50, you’ll pay more per month.
The message is fairly clear: life insurance can be affordable, but it requires that you plan ahead.
We believe life insurance is necessary and affordable for almost everyone in Portland, Oregon and Washington. The trick is to design a policy that covers your loved ones while saving you from unnecessary expense: many policies are bloated and include riders or additional coverage that aren’t really needed. You should also avoid advertisements for policies with “guaranteed coverage”: while these might provide coverage without providing medical history, the premiums will be high.
You’ll want to consider several questions when working with an agent on your personal policy:
- How much can you afford per month?
- Who are your beneficiaries, and how much do you envision leaving them?
- Can you afford a whole life policy while you’re young, when premiums are lower?
Factors that determine the cost of your policy include your health, age, and coverage amount.
At the Romero Agency in Portland, Oregon, we believe some life insurance is better than none, it will never cost you less than it does today. Start with what you can afford now and add to it later. You never know what will happen and if you will become uninsurable.
What Does A Typical Policy Pay Out?
There is no rule set in stone for pay out; you can choose your benefit or choose the premium. Typically the primary choices for term policies include $50,000, $100,000, or $150,000.
A whole life insurance policy’s benefit will depend greatly on your initial investment and rate of accumulation. Check your policy for the stated death benefit.
Quick Facts – Life Insurance
Can Life Insurance policy?
You typically have 10 days free look. After that you may cancel in writing or simply stop paying the premium and let the policy expire.
What are typical policy restrictions?
The insurance company will not pay your death benefit if you’re found to have passed away from a previously known, but undisclosed, medical condition. There is a suicide clause as well. However there is only a two year contestability clause. If the policy is in effect for two years the policy will pay the benefit regardless of how you died.
What’s the best age at which to buy life insurance?
If you want the best prices, buy insurance when you’re healthy. The younger and healthier you are the less the insurance will cost. It will never cost you less than it does today. We believe as soon as you are married, purchasing a home or starting a family you should put a policy in place regardless of your age.
Peggy Romero and Associates will help you go through your current financial situation, taking into account changes that may occur in the future, and help you select the type of life insurance that is right for you. Call our Portland office today to schedule your personal insurance evaluation at (503) 255-7828.