How do you buy an affordable term life insurance policy that meets your needs? The pricing of your policy is based on the amount insured and any riders it includes. Choosing the right insurance policy comes down to deciding on these key features and then shopping for the best rate.
Affordable Term Life Insurance: How much insurance do you need?
A term life insurance policy provides coverage for a specific period. Typically you would choose to buy a term life insurance policy to protect your family from financial hardship in the event of your death. How much insurance you need depends on the extent of your financial obligations and how much savings you have to meet these commitments. These commitments can include mortgage payments and expenses for kids’ education. Also you may wish to provide replacement income for your spouse so that your family can continue to maintain their present living standard. The term policy can also include coverage to meet your funeral expenses.
The premium that you pay on your policy depends on three factors, the amount of insurance required, the term of the policy and how the insurance company assesses you for risk. The term refers to the number of years that you want the policy to be in force. Insurance companies have developed criteria to assess the risk level of clients that include their age, gender, smokers or non smokers as well as factors like blood pressure, cholesterol, and any other health issues. Risky occupations or hobbies as well as history of illnesses are other factors that can lead to your being considered a higher risk for insurance.
What type of term life insurance policy should you choose?
To cater to the varying needs of consumers, insurance companies offer term life insurance policies with different features.
For a level term life insurance policy, you pay the same premium throughout the period it is in force.
Most term life insurance policies are convertible to permanent life insurance at some point during the term, or depending on your age and policy, they can even be convertible until the end of the term period. An advantage of this type of conversion is that you can convert to a permanent life insurance policy regardless of your health situation.
If you purchase a “return of premium term life policy” then the premiums that you pay are refunded provided you are still living at the end of its term. These policies carry higher premiums than other types of term life insurance.
Shopping for a term life policy
If you have any health condition – even common conditions like diabetes, arthritis or cholesterol elevation, make sure you speak with a high risk life insurance specialist.
To find an affordable term life insurance policy, choose an agent who works with many insurance companies and can negotiate on your behalf for the best deal. Periodically review your policy to check that your needs are covered. Clarify any clauses you don’t understand. Be honest when you file your application. Insurance companies refuse claims when you submit false information.
Finally confirm that your insurance provider is financially stable and choose a life insurance company that has an A or A+ rating from A.M Best.
To summarize, the premium you pay determines how affordable your term life policy is. It is determined in part by the amount of coverage, term and features you want included in your policy. Take advantage of the competition in the insurance industry. Shop around and work with a broker who can meet your needs at an affordable rate.
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