Los Angeles employees juggle tight budgets balancing mortgages, childcare, healthcare bills, car payments, and more. But what if tragedy struck suddenly for families through premature loss of loved ones? Pain compounds financially when income continuity disappears overnight.
This is why as an employee benefits advisor to LA companies of all sizes, we guide discussions around term life insurance. And through simplified, personalized configurations meeting needs of unique workforces, we jointly build benefit packages lifting immense burdens in times of unintended grief.
Let’s first clarify exactly what term life insurance is at its core, associated costs, variability factors, and how to determine sensible coverage by employee profile.
What is Term Life Insurance?
Term life insurance delivers pure death benefit protection for pre-defined “terms” or periods – typically ranging from 10 to 30 years based on policies selected. Assuming covered employees died prematurely within terms, proceeds assist beneficiary families managing life’s necessities like final expenses, mortgage payments, college savings for kids, credit card balances due and other liabilities.
Term life only pays while coverage terms remain active. Once periods expire, recipients no longer remain eligible for payouts unless new applications are completed and approved with understandably higher age-adjusted premiums.
What Do Term Life Policies Cover?
Again, the sole purpose is death benefit assistance for loved ones if the unforeseeable occurred – not “livelihood” protection for policyholders themselves. Proceeds derived from individual or group term life plans supply beneficiary families supplemental funds easing financial hardships connected to income discontinuity following traumatic loss.
Available death benefit amounts range anywhere from $25,000 to $1 million based on monthly premiums paid and applicants’ present health conditions. Typically healthier individuals qualify for the highest policy amounts at the lowest comparative rates.
Who Might Need Term Life Insurance?
Term life insurance suits various beneficiaries:
- Young families with kids requiring income replacement so daily expenses covered if parents died unexpectedly
- Single parents wanting to guarantee college savings for children if no longer around
- Business partners seeking continuity capital so surviving owners can acquire interests
- Older individuals with final expenses not fully funded yet through retirement savings
The central theme is protecting dependent lifestyles if and when premature demise of loved providers transpired. For such groups, term life is an affordable starting point.
Available Term Life Policy Durations
Term life insurance lives up to namesake by covering set increments or “terms” of time before requiring renewal. Typical policy spans seen are:
- 10-year terms
- 15-year terms
- 20-year terms
- 25-year terms
- 30-year terms
General rule of thumb is longer terms lock in lower base rates for extended years compared to shorter terms. Those enjoying good health today are wise to secure 20-30 year terms locking in prices. Rates increase significantly for older demographics as expected. Many employers offer group plans with guaranteed renewals up to age 70 as well.
How Much Does Term Life Insurance Cost?
Term life insurance remains extremely cost effective, especially for younger age groups not facing chronic health issues. Monthly outlays correlate to benefits selected and applicants’ present conditions.
For a healthy 30 year old, $500,000 of 20-year term life coverage may cost between $150-250 annually. Whether employer-sponsored or individual policies, term life supplies immense security on tight wages.
Some variables impacting rates include:
- Age at time of application
- Desired length of term
- Benefit amount requested
- Current health factors
Underwriting requires a medical history form detailing medical conditions, prescription medication uses, family histories with terminal illnesses, and lifestyle factors like smoking. Premiums rise responding to such chronic realities. Bottomline is healthier people pay less for term life insurance.
How Should Los Angeles Employers Structure Term Life Plans for Workforces?
Rather than “one size fits all” options insufficiently protecting unique needs of employee demographics, leading Los Angeles employers take proactive, caring stances customizing coverage. Certain communities warrant more protection based on dependent obligations. Younger families, single parents, special needs children, breadwinner spouses, debt levels, house poor scenarios, college savings goals and more guide thoughtful configurations.
That’s why LA companies have relied on us as their employee benefits partner for years. People’s destinies hinge on properly structured term life insurance in the most trying times. Let’s connect this week to start a conversation around options fitting your budget and community profiles.
