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Back to Basics: Term Life Insurance for Physicians

Back to Basics: Term Life Insurance for Physicians

September 21, 2021

As we near the end of Life Insurance Awareness Month, we want to circle back on the most basic form of life insurance and the most common questions we get from physicians about it. A term life insurance policy is a simple way to insure your family is protected from the unexpected. 

What is Term Life Insurance?

Term life insurance is a policy that covers the insured for a set period of time, usually 10, 20, or 30 years. The insured pays a premium, and the policy offers a level death benefit (meaning the death benefit does not change) should the insured person die during the policy time frame.

Term insurance is the most inexpensive form of life insurance, especially for younger and healthier physicians. Once the policy expires, you can then renew the policy or convert it to a permanent policy, with an increase in premiums.

How Much Does Term Insurance Cost?

Term life insurance premiums are based on a few items: your age, gender, and health status. The younger you are when you apply, the less expensive your premium will be. Males typically pay more than females, because they have a lower average life expectancy. Any major health concerns will also be factored into your insurance premium. 

The chart below shows some example life insurance premiums.

How Much Life Insurance Does a Physician Need?

One widely followed rule of thumb for estimating a physician’s life insurance needs is based on income. A physician may need a life insurance policy valued at five to ten times their annual income. 

When determining how much insurance you need, consider your short-term needs (medical bills, funeral costs), long-term needs (family expenses, cost of living), and future needs (college costs, leaving a legacy, caring for aging in-laws). Factoring in your needs and obligations can help you get a better idea of the amount of life insurance coverage you may need. 

Will I Need To Do A Medical Exam?

Maybe. Many life insurance companies offer no-exam life insurance policies, but sometimes an exam is required to get an offer. The life insurance process generally starts with an application, followed by a phone interview with a nurse. If something comes up in your phone interview, the insurance company can make the call to order medical records from your doctor or ask for a mini-medical exam. 

If an exam is required, insurance companies have worked to make the process as simple as possible. A nurse can come to your home or place of work to take your vitals and do labwork. The whole process is done on your schedule so as to not take up too much of your time. 

When Should I Get Life Insurance?

Term life insurance is always less expensive the younger you are. Physicians have busy schedules, so we always recommend obtaining a life insurance policy as soon as you have need for it. If you have a home, growing family, or medical practice, a term life insurance policy is the most basic way to ensure you’re protected. 

Ready to learn more? Before Life Insurance Awareness Month is over, take some time to learn about the types of life insurance available to you. Get your custom, instant quote on our site or send us a message for a review of your existing policies and insurance needs.