Term Life for Physicians
Term life for physicians is the most affordable type of life insurance. Although there is a definite place for whole life insurance, it is usually best to avoid buying a Universal or Whole Life insurance policy. Why pay three to four times higher premiums for the same amount of coverage? I cannot tell you how many people have switched to term life after having paid on a permanent policy for years and decided it was a bad decision.
In most circumstances, purchasing permanent life insurance does not make sense. Considering the recent advances in the underwriting process known as accelerated underwriting, applying for a term policy could not be easier. For healthy individuals with a clean medical background and immediate family history free from heart disease and cancer prior to age 65, some companies will quickly approve a life policy with no medical exam up to $2,000,000 at a preferred best rate. And term coverage periods with some companies have been extended to 35 and 40 years! With level term life insurance, you have the most substantial death benefit for the lowest price.
If you can afford it, make sure you buy enough term life insurance to protect your family from the very beginning instead of trying to add more coverage later. The younger you are, the less expensive it is. And, taking into consideration that your health is usually better when you’re younger, applying for insurance later could mean a significant increase in premiums. Changing health conditions can mean uninsurability at a future date.
Laddering Life Insurance
You might want to consider “Laddering” your life insurance. The principle is to purchase varying amounts of life insurance coverage with different term periods for various financial obligations. For example, you secure a $2 million term policy for 30 years for the long term. You then purchase a second policy for $1,000,000 for 20 years because you have young children, and you are looking forward to college expenses, etc. You buy another $1,000,000 for 15 years to cover your mortgage. You can use the same insurance company for each policy or use a different company for each policy.
How much Term Life Do You Need?
When calculating how much term life you need doesn’t shortchange yourself. Term life for physicians is affordable. If you are a resident, new attending, or fellows, your income will likely grow significantly over the next ten years. If you are in your 20’s through your late 30’s, you can purchase up to an average of 25 times your annual income. Insurance companies take into consideration your income potential and realize it will grow significantly over the next few years. Looking at the chart, if you are ages 18-35, you can purchase up to 30 times your income. If you are 36-45, it is 25 times your annual income. These factors vary slightly by an insurance carrier.
Residents and interns can purchase about 1 million based on a $50,000 per year salary. If you already have a position lined up, we can submit a cover letter indicating your potential income. In some cases, a company might require a copy of your contract. Most life insurance companies will issue the coverage based on your future earnings. Fellows or attending physicians shouldn’t have any problem purchasing more than enough coverage in their first year. If a new Attending earns $150,000 in their first year, they will quickly qualify to buy $3 M to $4 M.
Purchase Enough Insurance
In determining how much insurance you can purchase, we recommend a minimum of $2 Million. If you are fortunate enough to be reading this while you’re still a resident or intern, then purchase what you can and add to it as soon as you have a contract. You’ll already be buying the lowest cost life insurance dollar for dollar by buying term and buying it younger, so make the most of the opportunity and maximize your protection. You may be surprised to know that most $2 Million policies can cost less than your car insurance.
If you can afford to buy a 25- or 30-year policy, buy it. Once you don’t need the coverage anymore, reduce the death benefit, stop paying or cancel the policy. Play it safe if there is a minimal difference in the rates.
If you are in a specialty and you know your income will increase significantly in the next five to ten years, then purchase more than the average physician. It is usually a minimal difference to buy an extra million when you’re 30 years old compared to adding another policy at age 40.
Best Term Life for Physicians
You qualify for the best rates if you’re in perfect health, and your immediate family is living, and they have not contracted cancer or heart-related issues before age 60. Other risk factors like engaging in hazardous activities like rock climbing, scuba diving, being a private pilot, and military affect the price.
There are many low-priced A.M. Best “A” (excellent) rated companies. Of the over 850 active life insurance companies active in the U.S., we only use the top 1%. Most of these companies have been around for more than a100 years. They are well known and have a dependable history of paying claims promptly.
Don’t use one of the mail-order companies that you can’t get advice from a licensed independent agent. If there are medical issues to get around or you travel to dangerous countries, have had too many moving violations, we will find the company offering you the best rate.
Changes in technology have brought about many positive changes in the life insurance industry. Face-to-face meetings are no longer required. Companies have incorporated accelerated underwriting, “DocuSign,” and voice signature as a more advance faster approach to issue policies.
Avoid Captive Agents
A captive agent is just that, captive! They must offer only products from the company that has “captured” them. Unfortunately, this limits your choices at finding the best company that fits your situation. Many larger agencies that always advertise also only represent a handful of companies. The key to finding the best term life for physicians is to use an agency that represents multiple term life insurance carriers.
We only work with the best life insurance companies. Many of these companies have been around for a very long time are very well known and highly rated. We only use the top 1% of the 852 life insurance companies in the U.S. Many use the accelerated underwriting process.
Why Use Strahan Financial Services/Life Insurance for Parents?
We work with a team of highly talented individuals committed to providing you with unmatched professional service with over 250 years of combined experience. The quote you receive is 90% of the time your actual cost. We have worked successfully with the website “Term4Sale” for many years.
- We are professional
- We are knowledgeable
- We use the latest advanced technology
- We are customer-service driven
- We will earn your business
- We want to deliver beyond your expectations.
- We want to have earned a genuine “Thank you!” at the end of the process.
about Strahan Financial Services