Term life insurance is one of the most affordable ways to protect your family in the event of a serious accident. If you pass away abruptly, unexpectedly, and unprepared, term life insurance will provide your loved ones with the money they need to pay your final debts and ease the financial burden on your family with the loss of your income. Just because term life insurance is affordable doesn’t mean you should settle for just any plan. You need to lock in the best rate possible.
Here is a guide to help you compare term life insurance rates so you can minimize your insurance costs.
Factors That Influence Term Life Insurance Premiums
In order to compare term life insurance premiums, you need to know what aspects of your application determine what you pay. Some factors are well within your control, and others you just have to deal with. Influential elements include:
* Life insurance value: Higher values costs more
* Length of term: Longer terms cost more
* Health condition: Healthy people pay less
* Age: Younger people pay less
* Lifestyle choices: Smokers and heavy drinkers pay more
* Nature of work: Nonhazardous occupations pay less
At the end of the day, life insurance carriers will access their risk based upon your lifestyle and health. A licensed professional agent can help you find the most affordable option to meet the needs of you and your loved ones.
How to Compare Term Life Insurance Rates
Before you assess your term life insurance rates, you need to know how much coverage you need. If you just want enough money to cover your burial costs, a $25,000 life insurance policy should do the trick. “How much is enough?” is a big question. When deciding, consider the question, “How much money would take care of my family for x number of years should something happen today?
Once you know how much term life insurance you need, you can begin comparing various term lengths. Term lengths are usually 10, 15, 20 , 25 and 30 years in length. The shorter the term, the lower the payment as compared to the longer the term, the higher the payment. A good rule of thumb to consider is the age you have decided to retire and what your potential payment will be beyond that mark. In other words, your earning potential after retirement could affect your ability to pay premiums that were not a “burden” during your earning years.
When you think you have the right combination of value and term length, you should start assessing the different companies that offer coverage for you. Each company reviews applicants a little differently, which is why their rates change so much. Carriers have different Underwriting guidelines based upon medical history, health conditions or hobbies. It is best to be honest with your licensed insurance professional so that they can help find the most competitive solution for your needs.
How Term Life Insurance Compares to Other Plans
While you compare term life insurance rates, you may also be tempted to look at universal life insurance and whole life insurance. These are other forms of protection that essentially serve the same purpose as term life. The difference with these is that they offer investment opportunities that you could use as part of a retirement plan. If you are considering a separate investment into something like this, one of the alternatives may be perfect for you. Just keep in mind that whole and universal life policies cost significantly more on a month to month basis.
You may have to endure some trial and error to get the right term life insurance policy, but once you have it, you’re set. Renew or change the policy when the term is up, and repeat the process as long as you want. As long as you have some kind of life insurance policy, you know that your family will be financially secure after your death.