Life insurance is something that people don’t usually think about purchasing until they are sick or advanced in years. Unfortunately, accidents and illnesses can occur at any time in a person’s life. That is why it is important to start thinking about life insurance as soon as possible.
Many young people choose to purchase temporary life insurance policies, known as term life insurance. These policies provide coverage for a prearranged length of time, and also help secure the insurability of the policyholder into the future.
Term Life Insurance
For many people, life insurance is a big investment. Policies are generally reasonably priced, but the premiums must continue to be paid throughout a person’s life. This is a large commitment, especially if the person is 20 when they take out the policy and 70 when they pass away. That’s 50 years of payments!
Term life insurance may be a better option for someone who is not ready to make this lifetime commitment. Term life insurance policies are generally available for preset periods of time, usually five-year increments. Of course, a term life insurance company will willingly work with someone who would like a more specific time frame for their policy.
Term life insurance policies can even be a good way for a person to secure their ability to be insured in the future. Many life insurance companies will not insure people with pre-existing conditions. If they do insure them, the life insurance premiums could be very high.
If someone purchases a five year term life insurance policy when they are twenty and are diagnosed with cancer at twenty-four, most term life insurance policies will allow that person to upgrade to a permanent whole life insurance policy.
There are always some exceptions to every rule. Make sure that the term life insurance policy will allow this before you purchase it, if this is an important feature to you. Some life insurance companies offer policies that are in effect only up to a certain age; these generally do not allow upgrades.
Term Life Insurance Rates
Young people usually qualify for cheap term life insurance because insurance companies realize they are probably not going to have to pay out any money on these policies.
The term life insurance rate is always determined by the age and health of the potential purchaser. If the person is young and healthy, he or she will typically receive a low-cost term life insurance quote. If their health is questionable, there is a better chance that the life insurance company will have to pay a death benefit for them. Their quote will be higher than that of the healthy customer.
If you are interested in purchasing a life insurance policy there are many ways to find out how much your policy would cost. Insurance companies generally put a lot of effort into maintaining their websites. These are great resources for finding online term life insurance quotes and doing comparison-shopping.
There are also many life insurance brokers available that can help you find the best life insurance policy for your situation and your financial preferences. There are two kinds of insurance salesmen--ones that work for a particular company or ones that specialize in a particular coverage type that can show you different companies’ offers.
Term Life Insurance Vs. Whole Life Insurance
For many people, the choice between term life insurance and whole life insurance can be a difficult decision.
Term life insurance is inexpensive and temporary, yet still provides good coverage. Whole life insurance is also reasonably priced but provides permanent life insurance coverage. On the other hand, whole life insurance does offer many other benefits that you cannot get with a term life insurance policy.
Whole life insurance policies offer dividends and savings options. For some people, these added benefits make up for the permanence factor. Others are happy with just the basic protection that term life insurance policies offer.
One other thing to consider about term life insurance is that you may have to pay premium increases. Even if you have a fixed rate policy, you will probably lose that rate when/if you renew the policy. With whole life insurance, you are much more likely to get a consistent low rate over the entire course of your life insurance policy.
Cheap term life insurance policies can make it easy to provide protection for your family without jeopardizing your wallet. The flexibility of a term life insurance policy also allows you to change your coverage as your life changes.
No matter what type of life insurance policy you end up choosing, it must be the right one for you and your family. Knowing all of your options and staying up to date on insurance news can make it much easier to purchase the right life insurance coverage to meet your needs.