As a group, physicians tend to prepare well for their financial future, and for them, not all insurance protection is needed. But for most physicians, life insurance can offer financial protection that makes practical sense. In this way, we tend to call life insurance “essential protection.”
In our over 60 years of serving Texas physicians, we’ve learned that when it comes to life insurance, many prefer term life. This is understandable. Term life insurance coverage is immediate, simple, and cost-effective. Whole and permanent life insurance policies, with their income-producing capabilities and management fees, take time to build value. They tend to be multifaceted, complex, and more expensive compared to term life insurance.
Many physicians choose term life insurance to help protect their families financially early in their career. Others obtain a policy to help offer protection for their practice when partners are involved.
At TMA Insurance Trust, we offer physicians two kinds of term life insurance: Annual Renewable Term Life, and Level Premium Term Life. Either can help provide the right financial protection for a family or medical practice, depending on the situation. What are the differences between these types of coverage, and which is right for your needs?
Level Premium Term Life Insurance is just what the name implies. The policyholder enters into an insurance contract with the insurance company for a set number of years, which is the term. (This term is typically from 10 to 30 years.) Premiums are based on the age, gender and health of the individual policyholder at the time they apply for coverage. With a level premium term life plan, the premiums stay the same throughout the term.
Many physicians like knowing that their premium will stay constant over the term. This allows for easy budgeting. At TMA Insurance Trust, we work with leading, nationally-recognized life insurance companies to provide this coverage for Texas physicians.
Annual Renewable Term Life Insurance is the second type of term life insurance we offer. This is a one-year term policy that is guaranteed to renew every year for as long as the premiums are paid. Unlike level premium term life, the policyholder does not have to set the term at the start of the policy. They may keep the coverage for as long as it meets their needs and will not be hindered by a preset end date of coverage. Premium rates for annual renewable term life will increase based on pre-established five year age ranges (such as 30-34, 35-39). Rates increase with the increasing age and risk of the insureds. This may work well for physicians, whose income is lower at the beginning of their careers, but increases as their career advances over the years. TMA Insurance Trust offers the TMA Member Term Life Insurance plan exclusively for TMA Members and it is issued by The Prudential Insurance Company of America.
If you have questions about term life insurance, contact a TMA Insurance Trust advisor today. You can learn which plan will work best for your personal situation. Your advisor will be happy to provide unbiased guidance and advice based on their decades of experience assisting Texas physicians.
For over 60 years, TMA Insurance Trust advisors have been serving Texas physicians, their families and staff. TMA Insurance Trust prides itself on offering unbiased information and strategies to members, along with exclusive group rates on a range of the highest-rated plans in the industry.
