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I’m Going To Talk About $500,000 Life Insurance, What Do You Need To Know, What Options Do You Have & How To Apply
You’ve decided $500,000 life insurance feels like it should satisfy the goals you have set. You may have some questions, but we can help you analyze the details associated with buying a such a plan. Here’s hoping we can guide you to the answers you seek.
NOTE: Would you prefer me to present this information to you in video format? Watch the video below for the complete presentation. Enjoy!
Here’s An Overview Of Today’s Topics:
- Who Buys A $500,000 Life Insurance Plan?
- Why Buy $500,000 Life Insurance?
- Case Study Examples
- Top 10 Reasons People Buy $500,000 Coverage
- Stories From The Field
- Top 5 Reasons Why People Buy Life Insurance From A Broker
- What Types Of Programs Are Available For $500,000?
- Strategies To Getting The Best Plan
- What Factors Affect Your Insurability?
- Exam Or No Exam?
Who buys a $500,000 life insurance plan?
Let’s look at the reasons people look into plans at different points in life.
If you are single and don’t have kids, you may have wondered why you’d even need to consider life insurance. It might not be as much about the now as it is about the future. Locking in coverage now can give you the best rates and qualifications because of your age and lesser likelihood of health issues.
$500,000 in life insurance coverage can go a long way to take care of your future spouse and children.
If you’re single, have been in a relationship, and have children from that relationship, buying $500,000 coverage can be very supportive. It will allow you to take care of your children if you happen to pass away earlier than expected and not leave them saddled with any debt left behind. Taking out a policy of this amount is useful to consider, even if you are single.
If you’re married, congratulations! Chances are you’ve considered buying life insurance to protect your surviving spouse if you happen to pass away. This is a popular and crucial reason to buy life insurance.
Both of you depend on each other for your welfare and even if both of you earn an income, it’s likely that the loss of either one of you would have a dramatic effect on the lifestyle that you’ve grown and worked hard to create.
To get a free quote, please give us a call at (888) 626-0439. You’ll talk to an experienced representative who can let you know what your life insurance options might be.
Alternatively, send us a message using the box to the left. Let us know the best way to reach you and we will be in touch in 24 business hours or less with a free, no obligation quote.
Why buy $500,000 life insurance?
Life insurance will help replace future incumbents so that your surviving spouse would not have to suffer if you pass earlier than anticipated. $500,000 in life insurance coverage would take care of obligations that may be left behind to a surviving spouse. Examples include mortgages and debts, and a surviving spouse will receive a lump sum cash benefit to help alleviate these stresses from an economic standpoint.
You can also buy coverage if you are an up and coming/mid-career professional. If you’ve worked hard and received promotions, it’s likely your lifestyle and obligations financially have increased.
When you get promoted, you have higher income, which can lead you to consume more, buy more, and move into bigger houses. This can have a direct impact on how much life insurance that you need to cover your obligations.
It’s important to purchase coverage that’s not just enough, but more than necessary. This is why a $500,000 supplementary policy on top of the coverage you already have may expand your life insurance program. It will make sure that you’ve got enough to accommodate for the increase in income and lifestyle near or at retirement.
If you’re nearing retirement, it’s likely you’re planning on working longer than your grandparents and parents did. Therefore, you have a need to have life insurance to cover your income.
Additionally, you may be putting a larger portion of your income aside into a retirement plan more than you expected. Life insurance can cover these costs.
If you are retired and need a lump sum death benefit payout to pay for final expenses, you need to make sure the money is transferable to your surviving spouse. A plan for $500,000 is good to consider to replace those potential obligations.
Case Study Examples
First Time Home Owners with Blood Pressure Issue
A young couple reached out to me because they had just purchased a home. With a 30 year mortgage in place they knew they needed to ensure they could continue to make payments should either one of them pass away earlier than expected.
There was just one problem. The wife had a history of blood pressure problems. While she had kept it under control by taking medication, she was concerned it would have an affect on her application.
The good news is that since this couple decided to work with Buy Life Insurance for Burial we were able to shop the most competitively priced companies out there and offer them the best combination of pricing and coverage.
Cancer Survivor Worried About Retirement
A prospect, Mr. Peters, reached out to me because he was afraid that upon his passing his wife would struggle financially to have enough funds to retire and live comfortably. He was looking for an insurance plan to replace his normal income to ensure his wife would be taken care of.
This gentleman was 50 years old and was a cancer survivor. Though all of his tests had shown he was cancer free, he worried his cancer record would negatively impact his application.
Thankfully, because he contacted us at Buy Life Insurance for Burial, we were able to get him the coverage he required so that he had peace of mind in knowing his wife would be taken care of financially if he passed away.
Top 10 reasons people buy $500,000 coverage
What circumstances motivate people to buy life insurance? What life events? Let’s talk about the obligations that drive people to eventually decide that life insurance is a good purchase decision.
1st Covering final expenses
The first, and most common, is to cover final expenses. You may be concerned about the rising costs of burial/cremation, have expenses related to loans, or have obligations that must be covered upon your passing.
Most of the time, this will correspond to people in their late fifties and older.
Buying a $500,000 life insurance plan may be an opportunity to cover those obligations regardless of when you die.
If you have substantial debts that are necessary to be paid off, or if you need money left behind for your surviving spouse, a lump sum death benefit can alleviate your problems if you happen to lose your pension plan.
Very often, we see people buy $500,000 in life insurance to cover part or all of a mortgage. It is likely that you own a house, and that house usually represents the largest debt that a family may have. It makes sense to buy life insurance because if you do pass away now, you’re obligated to pay that debt. And someone has to.
A life insurance policy can be designed to pay the beneficiary, usually the spouse or the family. A lump sum $500,000 death benefit can go towards paying off or a portion of the mortgage, which will allow for the family to stay in the home.
3rd Business loans
Sensors–additional cash available–cover business loans. You may be a small business owner and are interested in expanding your business. You’ll likely end up looking at possibly getting a loan for $500,000 in coverage from the bank.
However, many banks require you to insure yourself against the loan.
If you die before the loan is paid, the policy’s death benefit will pay the bank and cover them in case they find that you’re dead and can’t recover on the investment that you agreed.
Consider buying life insurance to cover any business loans that you have to get a more favorable a review by the bank and to solidify the loan that you’re looking to take out.
4th Leave a legacy
Many people buy $500,000 in life insurance because they want to leave a legacy to family and special organizations. For example, they may want to leave money behind to grandchildren to give them a leg up in life.
Alternatively, they may have a church that they want to give money to or favorite organizations and charities. The process is fairly simple. You select the right kind of life insurance plan that best matches your legacy goals, and then you name the beneficiary as whatever you decide: your kids, grandkids, church, or organization. When you pass away, that money is paid out.
At the end of the day, all acts of purchasing life insurance are acts of love. Life insurance is a strange product. You make a decision to buy it. You don’t see any immediate benefit. You have to have a level of faith, trust, and love for somebody else’s welfare to buy this kind of product.
Ultimately, all reasons for purchasing a life insurance product stem from the act of loving somebody enough that you wish to provide them with the best welfare for their future and life without you.
6th Income replacement
Income replacement is a highly popular reason people buy a $500,000 life insurance plan, especially earlier in life and mid-career. When you pass away, a lump sum benefit is paid out to the beneficiary of your choice, typically your spouse. They use that money to take care debts and to continue living without experiencing serious and immediate economic adversity.
We all have goals in life of how we’re going to retire and what we’re going to save. Life insurance is a great solution, especially if a $500,000 plan replaces what you would have earned and gives peace of mind to surviving family members.
7th Retirement plan
You can also use insurance to protect your retirement plan. You can, within your income replacement life insurance plan, allot a percentage of that amount to continue funding your retirement goals. You contribute monthly towards your 401k, IRA, or a pension related plan.
You may get to the point in your life where your retirement is woefully underfunded, and your retired years may be spent struggling financially.
Make sure you buy a policy that accommodates and funds your retirement plans as well. It’s really important to keep that going to support surviving family members.
8th Business continuity
Another great reason is business continuity. If you’re a small business owner with a partner, you may want to consider drafting a document that stipulates buy-out provisions if one of you were to pass away.
It can also pay your heirs for the shares of what the company is worth. The problem with these types of arrangements is how funding will be manifested.
Many times, business owners think that funding can be borrowed from the bank or can be taken out at the business. But banks may not necessarily be willing to you let you borrow money. If finances change adversely, the bank may not be so willing to accommodate for a loan in that nature. The solution is to look at life insurance as a way to fund the buy-sell arrangement.
The beneficiary on the plan is the heir(s) of the deceased partner, the insured is the partner, and the payer is the company. The legal document stipulates that because the policy is taken out in exchange for the death benefit payout, the heirs agree to sell their portion of the shares to the surviving partners.
This allows for a cash benefit to be paid to the heirs, and it allows the business to continue in more or less the same fashion by the the owners of the company in the most profitable manner possible.
9th Covering key people
It’s important to cover key people. Another reason why business owners and entrepreneurs buy life insurance is not only to cover partners, but also the other important people in their arrangement.
If you’re like many business owners, you realize that businesses are the people. When we hire amazing people, and then lose them, it might have a tremendously negative effect on the success of your business.
Imagine losing a key salesperson. You may then potentially lose contact vendors and customers. This is where key player policy comes into play.
You can ensure the key person, and the corporation pays the benefit as well as the beneficiary on the policy. These plans are designed to provide liquidity in the case of short term adversity, to work hard to replace the person, and to offset any short term losses because of their unexpected death.
10th Supplemental life insurance retirement plans
Let’s talk about supplemental life insurance retirement plans. Another reason people purchase $500,000 in life insurance is to cover for the potential of a long life. This is accomplished through purchasing either a whole life insurance plan or index universal life insurance plan that are designed to develop cash values that are tax advantaged to supplement retirement income goals.
If you’re interest is peaked, be sure to give us a call for your free, no obligation quote. Talk to a friendly representative at (888) 626-0439 now to get your questions answered and find out what your options might be.
You can also send us a message using the box to the left or bottom of your screen to get in touch. We will respond within 24 business hours.
Stories from the Field
A couple of years back I worked with an 84-year-old gentleman from Georgia. He had bought insurance through my father and had asked that we contact him the following year so that he could add to his plan when he had more funds available.
I gave Mr. Smith a call and set up an appointment to go see him. As we sat down to discuss his coverage he told me that he was taking blood thinners to prevent cardiovascular complications. He had already had a mini-stroke and his doctors were concerned about the risk of another occurance.
Ultimately it was a little questionable as to whether or not he would get coverage at an affordable rate given this health issue. Luckily we were able to shop a number of providers and find him first day, full coverage which was payable to his children.
This allowed him to have peace of mind in knowing his final expenses would be covered. Just six months later I got a call from Mr. Smith’s beneficiary saying that Mr. Smith had passed away. We reviewed his policy and were able to within a short period get money to his children, which benefited them greatly.
This experience was memorable to me because it reminded me of how important it is to get quality, first day coverage. Had Mr. Smith gone with a different company, he may not have gotten first day coverage and the payout to his children would have been significantly diminished.
The moral of the story is that it’s important who you work with when you get life insurance. A broker like us at Buy Life Insurance for Burial do our very best to get our clients first day, full coverage to make sure you are covered no matter when death may occur.
Top 5 reasons why people buy life insurance from a broker
1.Want best rates
Consumers who want to purchase life insurance benefit from working with a broker by getting the best available deal of coverage and price. Brokers represent a variety of companies which means they can offer the best overall package deal.
2.Wants the most coverage
In conjunction with getting the best price, brokers are also able to make your dollar go further with the best possible coverage.
3.Wants client focused service
We do a better job of servicing the interest of the client than those agents that represent only one company because we are able to look at a number of providers. An agent that represent one company only one option as far as coverage and price. This can be detrimental to a client who is on a limited budget or has a particular health issue.
While eliminating bias is not completely possible, bias is certainly reduced considerably when working with a broker who has access to a number of different options for life insurance coverage.
What types of programs are available for $500,000?
Let’s detail the four most common life insurance types that are designed to offer $500,000. Each kind of program is designed to accomplish different goals. Programs are not a one size fits all, and it’s important that you understand the basic differences between life insurance types before you determine which direction you go.
(1) Term life insurance is the most popular of any kind of insurance available. Mainly, it’s cheap. It gets you the most coverage for the least amount per month, and it usually satisfies most of the goals people have to replace income, ensure retirement, and pay off debts.
The downside with term insurance is that you may outlive the coverage and still need it. This is why it’s important to do a careful analysis of what it is for which you need coverage. Most likely though, you’ll purchase term insurance because it matches your goals and simply because it is affordable and maximizes coverage.
Most people have temporary obligations which is why people choose term life insurance. See below for rates on $500,000 in coverage for tenure terms. These example rates are subject to change, and you may not qualify. You’ll find out when you apply, and you will need to take an exam.
10-Year Term Life Insurance, Best Price On Quoter
(2) Whole life insurance is the first type of permanent product that’s available. It’s designed to never cancel due to age or health. This can be purchased in lifetime payment programs or in paid-up programs where you pay off the loan program. You keep the coverage and never have to pay a premium again.
Like universal life plans, whole life insurance plans develop cash value and have, in some cases, dividends applied that are paid to the life insurance policy.
This helps accumulate a cash value account in your whole life insurance plan that you can borrow from at any point. Many people purchase whole life insurance because they have permanent obligations that need coverage.
This could be final expenses or pension protection plans; people who are older may need to have a death benefit paid out to protect their surviving family members or spouses.
The downside of whole life insurance is that it’s generally five to ten times more expensive in cost relative to term life insurance. It’s cost prohibitive for many people.
One type of person that would be interested in whole life insurance would be business owners looking for permanent protection for business continuity concerns. Another could be senior citizens looking for a policy to cover for burial costs.
Below, you’ll see rates for $500,000 life insurance for preferred bit coverage for males and females. These are subject to change.
Whole Life Insurance Rates, Life Pay
(3) Universal life insurance coverage is a hybrid form of life insurance. It takes some of the elements of term insurance and whole life insurance and combines them together. Universe life can be customized to the length of time you want it. It could be temporary or permanent.
You can also adjust the rates if you find yourself in a financial bind and need to lower your premium while keeping the policy. Most commonly, universal life plans are used as a supplemental life insurance retirement plans and sometimes in business continuity situations.
The biggest downside of universal life plans is not so much the product itself, but how it’s designed. There’s been a number of cases where people purchase universal life insurance plans just to have the price increase because they were improperly funded and designed.
Make sure you work with an agent that understands how to structure them correctly and advise you of both the pros and cons of a universal life plan. This will help you determine if it’s the best choice for your life insurance needs.
See below for rates for what we call a guaranteed universal life insurance plan. These are subject to change, depending upon underwriting. You have to apply and take an exam in order to be approved.
Universal Life Rates, UL to 100
(4) Accidental life insurance is the last type of life insurance coverage. It’s designed only to pay out upon accidental death. That being said, the coverage is only good if you die by accident instead of a natural death. But the rates are good, and they’re a good plan if you need supplementary coverage.
Accidental Life Insurance Rates
Strategies to getting the best plan
Let’s go over some strategies that will help you obtain a better overall package deal for your $500,000 life insurance program.
Define Your Goals
You’ve decided that $500,000 is the amount for coverage you’d like, but you don’t know if term, whole life, or universal life is the best package deal. What you need to do is to work towards solidifying your goals to feel confident in your purchase.
We here at Buy Life Insurance for Burial specialize in helping people solidify their goals so that when they decided to purchase life insurance through us, they are confident they’ve made the right decision.
Determine your Budget
You need to confirm your budget and make sure it accommodates the amount of coverage you need. One way to work with your budget better is shopping with a broker.
You can also, for example, purchase term life insurance for a shorter length to lower the premium. You may lower your coverage initially and then add more later as your budget allows.
Life insurance is vital. It would be foolish to skip buying it because you can’t get exactly what you want. Something is always better than nothing.
Most people build their life insurance program piece by piece. They don’t get their dream package up front. They build up to it over time as their budget and growth personally allows.
Work with a Broker
This is one of the most important aspects that will determine your eligibility to get the best quality coverage at the best rate. Brokers represent different life insurance companies, take your case, and shop it amongst the most competitive premium carriers. They will fight to get you the best package of value, coverage, and cost.
This is in contrast to a captive agent, who only usually represents one company. This company may or may not be the best choice for your particular circumstance. The best route is through a broker, which will give you the best edge and opportunity for the best overall deal.
What factors affect your insurability?
There are several different factors that may impact your eligibility to be approved for $500,000 in life insurance coverage. Let’s break this down.
Health, by far, will have the biggest impact on your eligibility for life insurance coverage. You’ll be asked a variety of questions relating to all bodily functions, organs, systems, and issues that may have arisen in the past, such as surgeries, procedures, and prescriptions.
Please be completely truthful and transparent. It will best determine what your ultimate eligibility for coverage will be.
Age directly affects your eligibility for life insurance. The older you are, the more you pay. But working with a broker can help you find companies that are more flexible with age related pricing than others.
What you do for a living may have an effect on your eligibility. Rates may be lower if you have a less active job like 9-to-5 in the office. If you work a high risk manual labor job, such as coal mining, oil rigging, or commercial fishing, you may have what’s called a flat extra added to your life insurance fee.
Either way, this flat extra is not guaranteed. It comes down to which companies would be more willing to work with you. That’s our job here at Buy Life Insurance for Burial, to accommodate for potential risks in rate increases and see who we can get for you that will give you the best overall package deal.
Just like your profession, hobbies can have an impact on your eligibility as well. If you do high risk and extreme sports such as mountaineering, mixed martial arts, boxing, sky diving, and scuba diving, you are at risk of paying higher for the premiums.
Again, some companies are more willing to work with you on these circumstances than others. That is why you need a broker to help.
Smoking also has an impact, not so much on eligibility, but on pricing. You’ll see a higher price when you smoke than if you don’t.
Height and Weight
Weight and height do have an effect on your eligibility. In most cases, it doesn’t decline you for coverage, but raises rates depending on your weight compared to your height.
Different insurance companies look at weight and height concerns differently. You’ll want to work with brokers like us at Buy Life Insurance for Burial that have access to companies that may be more liberal when it comes accepting weight problems such as obesity.
Exam or No Exam?
Is it a prudent decision, when looking at $500,000 coverage, to consider taking an exam?
We believe “yes.”
The larger the increase of coverage that you intend to qualify for, the more expensive that coverage will be.
If you look at a simplified issue, a life insurance solution will rely only upon medical records and prescription history to determine insurability. But it does not rely on current health issues, which could include those found during an exam.
In this exam, blood is withdrawn, vitals are taken, and a health questionnaire is conducted face to face with a doctor.
With an exam, you’ll find your opportunity for a better price escalates tremendously. As you get higher up in coverage, like at the $500,000 mark, you’ll find that your price is going to be dramatically better.
All our clients that are looking for substantial coverage we recommend to take an exam. Exams are easy, one-time, and simple. In exchange, you pay less and save more than a thousand dollars a year because of this decision.
I hope you have found this article useful and that it has encouraged you to get life insurance in place to protect the ones you love and achieve your personal financial goals.
If you would like to receive a free, no obligation quote, please call us at (888) 626-0439 now. You’ll speak to one of our friendly representatives who are experts in the life insurance field.
If you prefer to send us a message instead, use the box provided on the left or bottom of the screen to request more information.
Thanks for reading. Be sure to get in touch with any questions! We are here to help.