Term Life Insurance Term life insurance has become the most popular and sought after life insurance policy type for consumers since it was created.
It’s easy to understand, it offers great amounts of customization, and it boasts the best bang-for-your-buck of any type of life insurance policy on the market.
Term life didn’t always exist, and has only become available as the needs of consumers have changed over time. There are many carriers who offer term, and some of the best life insurance companies for term don’t even offer another type of product.
Let’s first go over the basics of why someone might need a term life policy.
Everyone has different needs for life insurance, and term can only solve specific needs when compared to other kinds of life insurance.
Because of these attributes, term doesn’t apply to every situation, mostly because of the limited time frame they can cover you and the lack of cash value growth.
If you want to secure permanent life insurance, or if you have a reason to access cash later in policy years, a term product is not the right solution for you.
We also offer a compelling ROP Term life insurance policy that will return your ENTIRE premium if you outlive the term period of your life insurance.
A common question of consumers is about how much they can expect to pay, but it’s not as simple as looking at prices for products in retail.
There are a lot of factors which go into getting an accurate quote, and even then, the rate is not final until the policy has been underwritten and issued.
Aside from underwriting, there are basic factors which go into how much a policy cost, some of which are in your control and others which aren’t.
Life insurance is all about statistics and the law of large numbers for the insurance company, and the lower risk you pose to them, the lower premium you’ll pay.
Accordingly, the younger you are the longer you’re expected to live, so you’re naturally a lower risk. The greater health risks you have, the more likely it is you won’t.
These make you, in the eyes of the carrier, unique, and so the premium you can expect is a detailed account of all these factors put together.
Certain things are out of control, like age, family history and, to an extent, health.
Even though you may be a perfect bill of health, if your immediate family has issues with heart disease, diabetes or cancer, you might lose any chance of a discounted rate before you even start.
Likewise, certain health concerns you may have had since the day you were born may yield you tougher difficulties in getting normal coverage.
Factors like occupation, hazardous activities and your driving record might seem a little odd to consider for someone’s life insurance policy, but each poses its own risk. If you wash windows on skyscrapers, you’re a little more of a risk than a clerk at a local grocery store.
In similar fashion, if you have a clean driving record versus someone who has a DUI and two speeding tickets in the last year, you pose much less of a threat to the carrier to pay an early claim.
All these things are only responsible for your rating, or health class.
Once this is established, the size policy, the duration you choose and the company you buy it from will be the final determining factors of what you’ll pay.
You do have the option of paying your policy monthly, quarterly, semi-annually and annually, with annual being the cheapest awarding those who take it about 5-7% of a discount on the price.
Look For Price Breaks - In life insurance, like shopping at bulk grocery chains, there are breaks in pricing for buying more coverage. Typical price breaks are at $25,000, $50,000, $100,000, $250,000, $500,000 and $1,000,000. In a lot of cases, it is cheaper to round up to the nearest price break than purchase beneath it.
Most insurance companies will offer a small discount if you pay annually. The percentage may only be 3-8%, but for larger premiums, this can add up quickly, especially over a 10 or 20-year policy.
Laddering simply means taking advantage of the flexibility of different types or different lengths of life insurance policies to handle more than one affair.
If you don’t get the rating you intended, but don’t seem to have another option, you may have the ability to ask for a reconsideration from the issuer. Even if the carrier does not decrease your premium, there’s no harm in asking because it won’t ever increase; it can only go down or stay the same.