There are a wide range of life insurance products that are floating in the market. Choosing the right life insurance policy involves assessing your particular situation and evaluating the right policy for you. It is imperative to choose the right life insurance that fits your bill or which can be customized to suit your particular needs.
Unlike whole life insurance, term life insurance is purchased to cover a limited term period. Term life pays the insured sum only when the insured dies within the time span of the policy. Term life policies do not accrue any cash value. So if you live past the length of the policy, you won’t receive any money. It is also important to understand that premiums for term life policies may not be fixed, and may increase from time to time. To avoid this, be sure to look for a guaranteed level premium term life insurance policy. These policies guarantee a level premium throughout the term period.
Advantages of a Term Life Insurance
Term life insurance covers the maximum insurance for your money. It can be beneficial for those families that have more financial obligations than current assets. Here are some of the advantages of a term insurance:
Affordable
Term life insurance offers the most affordable premiums against high death benefits.
Simple
Term life insurance is the most simple life insurance product available in the market.
Competitive Pricing
Since term life policies are simple in nature, they can be easily compared on the basis of price and features. This makes term life insurance an appealing commodity in a very competitive market.
Flexibility
Term Life policies may include “renewability” and “convertability” options. The renewability feature enables you to renew your term policy at the end of the term, without having to undergo a medical exam. A convertible feature allows you to convert your term life policy into an equivalent whole life policy, which accrues cash value, should you feel the need to switch to a permanent policy.
Waiver of premium
There is an additional optional feature called “waiver of premium”, which means that in the event of your inability to pay premiums due to circumstances stipulated in the term life insurance contract, the insurance company will waive payments for a stipulated time. However, this feature comes with an extra charge.
Short Term Coverage to Suit Your Needs
Term life is suitable for short term coverage. If your mortgage can be paid up in ten years you may want to choose a term policy for ten years. Most people do not envisage requiring life insurance in their senior years, so a term life policy makes sense for short term financial planning.
Deciding If a Term Life Insurance Policy is Right for You
Deciding the right life insurance policy is a very important step in securing your family’s future. If you are looking for a low cost, budget friendly life insurance plan, choosing a term life insurance policy would be your best option. Moreover, term life insurance is a good choice for people on fixed incomes and with a growing family. If you have a mortgage, educational loans, estate taxes or other liabilities, your sudden death would place an overwhelming financial burden on your family. Term life insurance provides high death benefits at the most affordable rates. This is why term life policies are the most popular life insurance policy. You should determine the amount of life insurance coverage that enables your family to clear all debts and provide a tidy some for their future. You may want to include college funds for your children in your coverage.
Here is a quick check-list that can help you to decide if a low cost term life insurance policy is right for you:
- If you’re on a budget and cannot afford a very high premium.
- If you are young, and in good health. You can take advantage of low premium rates.
- If you are looking for a simple, straight-forward, low cost life insurance plan to protect your beneficiaries.
Most people need life insurance and term life is suitable for all stages of life. Term life policies offer a cheap option to suit your needs. Term life is also easy to purchase. Many online life insurance providers have access to hundreds of reliable life insurance companies. By feeding in your personal information, you can receive numerous quotes for comparison within minutes. Remember to be completely honest in answering questionnaires. Use sites that are absolutely safe and are certified by the Better Business Bureau to safeguard your interests. Many online sites, provide cheap initial quotes to attract customers. They may end up being a disappointment.
Many people think they may not be eligible for a term life policy or they will have to pay high premiums because they suffer from certain health conditions. But there are online life insurance providers who can help you find life insurance companies that may look more favorably on certain medical conditions than the regular life insurance companies. This is where shopping around for term life policies will come into play. If your health is poor, you may want to check out these Insurance FAQs for help in how to find companies that may be able to offer you more favorable quotes even if you do suffer from certain medical conditions.
Conclusion
Choosing the right life insurance that suits your needs is simple once you’ve studied your options thoroughly. Utilize the Internet’s resources to educate yourself about life insurance basics. Factor in your personal situation, present debts and future liabilities and you will be able to gauge how much life coverage your family would need. Many online insurance quote providers can help you with your queries and offer professional advice on choosing the right policy for your particular situation. And once you factored in all the scenarios, and have numerous term life policies to evaluate, choosing a life insurance not only becomes easy, but beneficial too.
Watch the video related
Being a financial services professional, Mark Wandall understood the importance of insurance and the need to protect himself and his wife, Melissa. Sadly, at age 30, Mark was killed in an auto accident by someone who ran a red light. The life insurance has allowed Melissa to remain in their home and be a full-time mom to their daughter, who was born two weeks after the accident. Melissa has kept Mark’s spirit alive by creating two important causes, The Mark Wandall Foundation that raises …
Help answer the question
What exact is whole life insurance, and how do life insurance companies profit from selling it?
Agents are always extremely keen about selling my family whole life insurance instead of term. According to the agents, whole life is preferable to term since it does not expire and as a result the beneficiary is guaranteed some payment upon the death of the insured. However, why would the insurance company profit from such a setup if they are bound to pay back an amount that is at least equal to the total amount paid?
I have tried to do some research on my own, but I still can't seem to fully understand this matter. Any help will be greatly appreciated!
life insurance
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#1 by WPMixer on October 24th, 2009
Everyone should have some type of life insurance, it should be a law!
#2 by Robert M. on October 24th, 2009
As mentioned these are companies that basically con money out of you.
If you are diagnosed with a terminal illness these companies will pay you a portion of the benefit amount if you sign the policy over to them. (IE: If the benefit amount is $100K, they will pay you $90K now if you sign the policy over to them so when you die they get the whole amount).
Most insurance companies have clauses built in there you can have the living benefits paid out in full if you have a terminal illness.
If you are in debt, these companies are of absolutely no use to you, unless you are going to die in the next couple months. IF that's the case, just have your beneficiary pay out your debts with the full benefit amount instead of a reduced amount.
Google search "debt snowball" to see a good strategy to pay out your debts. It's widely promoted by guru's like Richard Kiyosaki (Rich Dad, Poor Dad series), Dave Ramsey (Total Money Makeover guy), and most debt management companies.
#3 by Ant on October 24th, 2009
You can pay the premiums and name yourself as the beneficiary and you will be the policyholder and in control of the policy.
Your aunt will have to consent and work with you. You will also have to prove insurable interest. You are not allowed to purchase life insurance on someone unless you can explain to the insurance company why you will be financially effected if she dies. With children and spouses this is usually not a problem. Proving why you need a life insurance policy on your aunt, in another state, that you have to pay for might be difficult unless there is a specific reason.
#4 by Wordpress on October 24th, 2009
Beautiful … Melissa is a friend. I so respect her and what she’s doin in Mark’s name!
(Also widowed — but no life insurance), Wendy
#5 by mikeyeggs on October 24th, 2009
Well, as you know, there are many sites out there offering life insurance. That's why you're asking your question.
Some of the top term life insurance companies include: New York Life, Nationwide, State Farm, Allstate, MetLife, Prudential,AIG, Northwestern Mutual, and Mutual of Omaha.
You can get instant quote comparisons from these companies at http://www.term-life-online.com/top-term-life-insurance-companies.html
However, there are several points to understand about buying life insurance before you purchase a policy. Here is a list of important information to know about term life insurance:
Knowing how much life insurance to buy and which type of policy is right for you can be difficult. Here are some tips to help you find the right policy, save you time and money on your life insurance.
Don't wait until you really need the coverage! By that time you'll be that much older, you may be sick or you will have encountered a health issue that will cause your premiums to be much higher than you expected. That is of course if you can even qualify for the life insurance coverage. The point being, if you know you need life insurance coverage – DON’T DELAY!
The highest financial rating doesn't necessarily mean better coverage. The important thing is to at least be looking at an "A" rated company. There is little, if any difference between one company's term policy and another, so basing a decision only on financial ratings won't always get you best rates on your life insurance policy. The highest rated insurers tend to be more conservative in their underwriting, so you may not be able to get their best rates.
Shop and compare life insurance quotes online before you meet with an agent! Many online life insurance brokerage companies can save you up to 75% on your premiums. The reason is because they offer you quotes from many different companies seeking only to get you the best rate available.
Choose the annual premium payment option, if you can afford it. Paying annually can save you up to 20% with some life insurance companies versus monthly, quarterly or semi-annually premium payments.
Don't smoke. Smokers are charged up to 2-3 times more for their life insurance coverage. If you want to save money on your policy, quit smoking. If you do smoke, most companies will let you re-apply for nonsmoker rates if it has been at least 1 full year from the last time you had any tobacco products in your system.
If you have cholesterol or blood pressure issues get it controlled with medication. Insurance companies don't like to see health issues go unattended. If you are doing something to control it they will probably look at that favorably and give you the benefit of the doubt when it comes time to approve your life insurance policy.
If you are considering buying $90,000 of coverage, buy $100,000 instead. Many times it will cost you less money, the same or just a little more for the additional life insurance coverage. Insurance companies may give breakpoints at $100,000, $250,000, $500,000, $750,000 and $1,000,000. So it won’t cost you that much more in annual premium to get the higher amount of coverage.
Read the Medical Exam Tips before completing your exam. Drinking caffeine or exercising just before your medical exam can throw off your lab results and cost you big time on your life insurance premiums.
Obtaining coverage through your company's plan may be a good alternative in the short-run. Many employer's plans won't let you continue your coverage if you leave. If you need coverage then, you'll have to apply for an individual policy anyway. You may or may not be insurable at that time. Why take the chance? Get a separate policy in force now to guarantee your insurability in the future.
If you're 35 years old, you're as old as 36 in the eyes of the insurance company. Most insurance companies round up to the next highest year when determining your age and because premiums increase with age that can make a big difference in your annual premium. So, if you're approaching 30 or 35 and you have thoughts of applying for a life insurance policy, don't wait!
I hope that helps! Best of luck with your term life insurance.
Source: http://www.term-life-online.com/tips-on-buying-life-insurance.html
#6 by Judy D on October 24th, 2009
It depends. If you are young and have a family, yes. Buy level term as far out as you can. Hopefully at some point as you get older, and have money, you can cancel the term.
If you buy whole life, you'll pay a lot more for………. your whole life. Agents would rather sell you this, as they make more commission.
Term is like renting, it's pure protection in case you, the breadwinner dies prematurely. Whole life is like owning a home. Your heirs will get something out of it down the road, and you can borrow on it, but it can cost you up to 10 times as much every year.
#7 by Colorado Man on October 25th, 2009
You must be stroke-free for at least two years and following your doctors recommendations for improving you health before you can be considered for life insurance. Until then, you can get accidental death insurance which covers almost any accident (falling off a ladder, auto accident, getting killed ) which is the #5 leading cause of death. The lowest price right now is $26 a month for $250,000
#8 by http://www.wfcmarketing.com on October 25th, 2009
First you have to know the difference between the two.
Term Life Insurance only insures a specific period of your life. For example 5, 10, 15, 20 or 30 years. Typically you would purchase term insurance during your income producing years because that is usually when people incur the most debt. I.E. mortgages, kids college expenses, car payments, credit card debt, etc…
Whole Life Insurance covers your life from the day you purchase it for the REST OF YOUR LIFE (as long as you continue to pay the monthly premium). Whole life insurance also generates cash value, which you can borrow against or cash in.
Now which one should you buy? Both types of insurance are designed to protect different things. It is always better and cheaper in the long run to purchase a whole life insurance policy when you are young instead of trying to purchase a term insurance policy when you are old.
Term insurance is always cheaper than whole life when you are comparing rates for the same person. If you own a term insurance policy now, take a look at the policy illustrations for when your policy expires and you will see the type of price increase you would have to pay to continue that coverage.
The biggest advantage to purchasing a whole life policy is that you will not have to prove insurability again when you get older. If you develop a medical condition, it could seriously hamper your ability to purchase a term policy at an affordable rate.
As an insurance agent I see a lot of older folks who are in their 50's, 60's and 70's that struggle to purchase life insurance because the prices are extremely expensive.
My recommendation to everyone is that you purchase a small whole life policy when you are in your younger years and you purchase term insurance to cover your income producing years.
You can visit this website to get life insurance quotes, both term and whole life insurance:
http://affordablelifeinsurance.wfcmarketing.biz
#9 by miken on October 25th, 2009
Term insurance because it cost less and you decide where you want to save your money. I wouldn't let any insurance company decide what to do with my money. I only need insurance to manage my risk against financial loss.
#10 by marty7477 on October 26th, 2009
Try this site
http://linsurance.notlong.com
here you can get quotes from different companies in your area.
#11 by tak3032 on October 26th, 2009
Any company having solid financial ratings (I recommend AM Best A+ or higher) is fine, as long as you are certain you'll only need term. Keep in mind that as your life situation changes, term may not be the entire answer. You need to consult with a financial advisor to determine the best solutions to your current situation, while keeping options open for the future. The key here is to do a proper analysis, and to ensure that the term you buy has adequate conversion options to secure your future insurability. The couple of bucks a month you'll save price-shopping term isn't worth risking your family's financial future.