Term life insurance is a financial contract between you and an insurance company. Known as ‘pure insurance’, the insurance company agrees to pay your named beneficiaries (usually a spouse of family members) a specified lump sum payment should you die during the agreed upon term of the contract.
In return, you agree to pay a specified amount of money known as the premium either monthly or quarterly to the insurance company to maintain the policy and keep it in force.
Term life insurance rates are the most economical and affordable forms of life insurance available. Your term life insurance quotes and rates will be much cheaper than other forms of life insurance such as whole life or permanent life insurance policies because there is no investment or cash build up features included in the policy.
Instant Life Insurance Quotes
Before you even begin shopping for life insurance quotes, there are two crucial components you need to consider.
The first is the ‘term’ or length of policy you will require. This can vary from a renewable annual policy to chunks of time ranging from 5, 10, 15, 20, 25, 30 years and in some instances up to a specified age. For example, if you are shopping for life insurance over 50 ( you are over 50 years old ) make sure you take a look at the different rates for the terms.
When shopping for the best term insurance rates, keep in mind that term life insurance premiums increase with age and as premiums are fixed for the duration of the term of the contract, it is generally a cost saving feature to go with a longer term. Also, if possible, it is wise to get online insurance quotes at a younger age.
Your second most important consideration is the amount of coverage, which is the lump sum payment you will require to cover the financial needs of your dependents.
The major factors you should consider when determining your insurance needs could include some or all of the following:
1) Replacement income such as current and future salary the heirs would need to still have coming in
2) Current and future anticipated debts
4) Child care expenses and future education costs such as tuition for college or university
5) Future obligations and expenses of elderly relatives
One of the big advantages of term life insurance is that even if you are on a tight budget you can start with shorter policy terms with a lower lump sum payout and increase the length of both the term and the lump sum payout as your financial circumstances change when your original policy expires. This assumes you are still insurable at that time, and in good health to qualify for additional insurance.
Once you determine your needs you can compare to find the best term insurance prices by comparing online life insurance quotes to compare the cost of the premium for the length of the term and the lump sum payout you are seeking. You can also use online life insurance calculators and get instant life insurance quotes from multiple companies.
To qualify for coverage you will most likely be required to get a medical examination and fill out a medical questionnaire detailing your medical history before the insurance company can determine the amount of your premium.
It pays to shop around to get the best term life insurance rates.
What Happens at the End of the Term?
When the agreed upon term of the policy expires, your coverage ends. The good news is that you can apply for another policy and change the term of coverage and the amount of insurance to suit your current and future circumstances, again assuming you are still in good health. Just remember though that premiums tend to be somewhat more expensive the older you get.