Five Things You Should Know About Term Life Insurance

Term life insurance is not only the cheapest life insurance, but it is also the most popular choice being a very affordable protection against the uncertainties of life. Term life insurance meets temporary life insurance needs covering the most vulnerable years of your life when families usually have high debts to pay off and a tight budget to maintain.



In order to maximize your prospects of getting the best term life insurance that suits your specific needs, there are five points you should keep in mind.

1. 
   Term life has several variations. Make sure you explore each one to know which one fits your needs the best.
   




• Guaranteed level term is the most common choice. Your premiums remain steady for the entire term period which may be 5, 10, 15, 20, 25 or even 30 years.



• Return of Premiums (ROP) term life insurance is available for a 15, 20, or 30-year term. In this type of term policy, the premiums remain level throughout the term period. The policyholder is guaranteed a refund all premiums paid. This type of policy is significantly cheaper than a permanent life policy but it also provides cash value (without interest) at the end of the term period, if he/she is alive at the end of the term period.



• Increasing term life insurance is useful when you have a small budget to begin but would like your coverage to increase each year to reflect inflation or to keep up with your income. The premiums increase periodically as does the coverage.



• Decreasing term life insurance is useful when you want your coverage to decrease over a time period. This type of insurance is chosen when you want to cover a mortgage or a loan which decreases over time. The premiums usually remain level throughout the term period.




2. 
   Term life insurance rates are very competitive. You’ll find the best life insurance product for the cheapest price, if you shop around. This is because each life insurance company has its own underwriting process, and while the basic criteria remain the same, there are distinctive differences intended to give a company the competitive edge over other companies. If you’re using online term life insurance quote providers, it’s not hard to locate companies that would give you the best term costs, despite any health concerns you may have.
   
   


3. 
   Don’t go for the cheapest life insurance policy. Look for options that may cost you a few extra dollars but may be very useful to you at a later stage in life such as:
   
   
   
   Renewable option: this option allows you to renew a term life insurance policy at the end of the term period without having to prove insurability. You don’t have to go through a medical exam and you don’t need to go through the underwriting process. The premium rates will change according to your age and the new term period.
   
   
   
   Riders: Some life insurance companies will throw in riders such as a child rider or accidental life insurance for free; some may charge you a small price. It’s worth considering these.
   
   
   
   Convertible option: this allows you to convert to a whole life policy without having to prove insurability, within a stipulated time period. The new premiums are based on the face value you desire for your whole life policy and your age at the time of conversion.
   



4. Don’t buy too much coverage, or too little! There’s no sense in having too much coverage and paying higher premiums. The excess you pay in premiums could be used for better purposes or put into savings. At the same time you don’t want to leave your family inadequately covered. Calculate your coverage needs carefully. Remember, your coverage is meant to compensate for loss of incoming, not hit a lottery. Many experts recommend 10 to 15 times your annual income as a ballpark figure. If you need help in calculating coverage, use online life insurance coverage calculators.
   
   
   You should assess your coverage periodically, especially when there is a life-changing event such as a marriage, birth of a child, divorce, payment of a loan, etc. Your coverage needs to reflect your current financial position.
   


5. Check the financial rating of the life insurance company before you purchase your life insurance. Look for ratings from reputable financial raters such as A.M. Best or Standard & Poor’s. A rating of A or A+ shows that the company has outstanding financial integrity and a history of paying claims in a timely manner.

Conclusion



Read your policy carefully when you get it. Most companies give you a “free look” period of 15 to 30 days. If you have any doubts you should call up your agent or speak to the company representatives directly. During the “free look” period you can review the policy and reject it if you feel the terms and conditions are not acceptable to you and get a full refund of the premium you paid. To make it easier for you to find a policy that best suits your needs, check out life insurance quotes on reliable websites.



About AccuQuote:



AccuQuote is a leader in providing term life quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term life insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.