Finding low cost life insurance can be a challenge. Term insurance is typically the most affordable type of life insurance because it covers a specific period of time instead of providing “whole life” insurance. If you’re young and on a budget, just starting out with a family, or even if you’re older and only have a limited need for life insurance, then term life insurance may be right for you.
U.S. Life Insurance Facts
- According to LIMRA, which conducted a Life Insurance Ownership Study in 2010, almost 1 out of every 3 U.S. households (35 million) do not have any life insurance at all.
- The LIMRA study showed that 58 million households, or almost 50%, admitted that they did not have enough life insurance coverage.
- The study also revealed that on average almost 6,850 Americans die in the U.S. each day and 48% of these people die without any life insurance coverage to protect their families.
What Is Term Life Insurance?
Term life insurance is simply life insurance for a specific term, such as 5, 10, 15 or 30 years. Many term policies and options are available to choose from, so this type of insurance can easily be tailored to your life insurance goals.
There are several important features of term life insurance:
- It offers you great flexibility; you can buy a policy for a term that can range anywhere from a one-year renewable policy, to a 30-year term, or an age-specific time in your life such as 65 years, among other options.
- Term life insurance pays out non-taxable death benefits to the beneficiary.
- Term life insurance premiums are considerably cheaper than permanent life insurance policies.
- The amount of death benefit you choose is also very flexible; you can buy anything from a $5,000 policy to a $1,000,000 policy or more.
- When you buy a term policy, the annual or monthly premiums you pay are fixed and guaranteed for the term of the policy. At the end of the term you will be given the option to renew the policy, at which time you can alter it to suit your changing needs.
- Many policies also offer you the option of converting your term policy into a permanent life insurance policy such as a universal life policy.
- It’s easy to get approval. If you are relatively young and in average health you won’t be required to take a medical exam. Most people simply have to complete a questionnaire to get approval. Even as you get older, medical exams associated with term life insurance are fairly simple and straight-forward. Taking the exam will typically save you money because the insurance company can more fully measure your health risks.
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Why Should I Buy Term Life Insurance?
Some of the main reasons to buy term life insurance include the following things, all of which can prevent financial burden for your family upon your passing:
- Replacement income for your family if you are the primary income provider
- Funds to pay off your mortgage
- Money for your children’s college tuition
- Funds to pay off debts such as credit cards and loans
- Expense coverage for your end of life costs and funeral
- A financial legacy for your loved ones
Are All Term Life Insurance Quotes the Same?
Actually, all term life insurance quotes are different, due to many variables involved. Life insurance quotes vary from one company to another, along with the term and death benefits you specify, as well as your age and your health status.
You can often get a ballpark idea of what you might pay for term life insurance by viewing online term life insurance rates, although you may not get a full picture of what you are buying and how well you will be covered. To fully assess your life insurance goals, work directly with a knowledgeable agent who can help you compare accurate term life quotes based on your real life needs, and help you find the best possible policy for you.
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Additional Term Life Insurance Tips
Here are a few other things you should know about term life insurance:
- Term life insurance is more expensive to buy as you get older.
- If you buy a 10 year term policy and want to renew it at the end of that term, the premiums will be higher than what you were originally paying, so choose the length of the term carefully.
- Term insurance is more expensive if you smoke, but you may be able to reduce your premiums if you quit and remain a non-smoker for at least a year.
- You can buy term life insurance in most cases up to age 85.
How an Independent Agent Can Help with Term Life Insurance
Term life insurance is typically a great value and easy to get. You also have a lot of flexibility to buy a policy to suit your own individual requirements. Since there are different types of term life insurance policies available at different rates, it is important to get quality advice from an agent.