The Price of Term Life Insurance

In recent generations, life insurance has gotten a bad rap and people have actually been opting not to buy it. Term life is not an outdated notion until people stop dying unexpectedly, leaving financial dependents high and dry. Learn the 10 rules about the price of term life insurance here.

It could make the difference between your kids and widow or widower ending up in the poor house.

Before beginning, understand that there are many flavors of term life insurance, which are worth your time to explore. When comparing policies among different insurance carriers, the price may differ for a handful of compelling reasons.

Be sure to use the FREE comparison tool at the top of this page to start your search for term life insurance!

Why Policy Premiums Differ

There are several simple reasons policy prices vary:

1. The carriers may be offering up more than one type of term life insurance policy.
2. Insurance companies might be up-selling you to their other life insurance policies, which is an article for another day.
3. Some carriers charge higher rates and do not look at your personal stellar health and low-risk life
4. Others evaluate potential policyholders by conducting blood tests, lengthy questionnaires. The policy for an airplane pilot or sky diving instructor is more costly than a telecommuting writer, for instance.

Rule 1:

Term life insurance is a necessity, not a luxury if:

1. You have dependents.
2. You are the sole financial provider.
3. Your spouse and family cannot financially survive if you die.

Rule 2:

The price of term life insurance is the most affordable of all life insurance products.

Knowing this makes the price of term life insurance more manageable. Another added bonus? Compared to the rest of life insurance products, term life insurance, typically carries the lowest price tag. The reason for this is the terms are fairly short, anywhere from five to 30 years. The word term defines the period of time that the policy is in effect.

By comparison, permanent life insurance policies cover you for life, up to 100, and include an investment aspect that builds in cash value over time. That is where the simplicity ends and a jumble of different kinds of term life insurance come into play.

Rule 3:

Get to know the three kinds of term life insurance. New York State has a great go-to source of basic information and definitions on the topic on the Internet.

1. Level Term Insurance
2. Decreasing Term Insurance
3. Annual Renewable Term Insurance

Rule 4:

Weigh the price of term life insurance among all carriers offering you a policy.

If you have options, you might be selling yourself short if you fail to invest time in weighing the policies carriers offer you.

Rule 5:

Know the rules of level term insurance.

The death benefit remains the same for the term of the insurance policy. Did you know that the premium payments may remain level for the entire policy term, a specified period, or could increase over time.

Rule 6:

Get to know decreasing term insurance means.

A compelling reason to buy this policy type, whose death benefits decrease over time, is to accommodate lessening financial burdens, such as a mortgage. Though, what you may not know is that the premium remains level for the entire policy term.

Rule 7:

If you are low on cash now, but expect to make more money over the life of your policy, read on here. Annual renewable term insurance provides an even amount of death benefits for the duration of your policy.

To accommodate your financial squeeze that will lighten up, you can opt to pay increasing premiums every year.

Rule 8:

Some term life insurance policies are renewable.

If you have to pay an extra $20 a year to receive this option, it might just be the best money ever spent. The reason is simple. Renewable term life means that when your first term ends, you may qualify for renewal without any medical checkups. You probably will pay higher premiums, but it may be worth it.

Rule 9:

Convertible term life is a very cool concept, though not every term life policy comes with this option.

If you are not sure whether you will be on board with life insurance as an investment in 20 years, when your term policy runs out, then consider a convertible term policy. A convertible term actually allows you to switch from a traditional term life insurance policy to one of the investment-minded life products.

1. Convertible term is shorter than the entire term of your life insurance policy.
2. Convert from a term life policy to a permanent life insurance policy during the convertible period.
3. Not all term life insurance policies offer convertible options.

Rule 10:

The only reason an insurance carrier can cancel your term life insurance policy is if you fail to pay your premium. Otherwise, as long as your policy term is in effect, you have insurance. Read your policy to find out how much of a payment grace period you have before the carrier would cancel for non-payment of your premium.

Prepare to answer lengthy questionnaires, talk to insurance representatives and read a lot of policy details before being offered and accepting a policy. The questions will include everything from information about your line of work to hobbies, mental and physical health history and desired coverage amounts.

Build rapport with insurance agents, because their their professional knowledge of policy terms and how that translates to real life is indispensable. Now, no one can decide how much insurance you need to buy, not even an insurance agent. They are allowed to describe coverage and explain it to you, though.

Tips for Buying Life Insurance:

1. Compare price of term life insurance among all the carriers who offer you a policy.
2. Explore options such as convertible, annual renewable, decreasing term and level term life insurance policies.
3. Be prepared to answer many health and lifestyle questions.

Buying term life insurance is as simple as knowing you need this if you have any dependents and any questions about who would pay the bills if you died.

Get the highest quality policy that provides for your dependents if you cannot be there for them. Do not let untimely death turn into a lifetime of financial tragedy for your family.

Be sure to compare policies using the FREE search tool below now!