Term life insurance rates have decreased dramatically in recent years due to the increased price competition that the Internet has brought among insurance companies. In the past is was difficult to compare term life insurance quotes because of the massive amount of paperwork (and legwork) that was required to get some solid pricing information.
Now it is a matter of just a few quick moments in front of a computer and you can get an apples to apples comparison of many different kinds of term life insurance. 10 year term, 15 year term, 20 year term, 30 year term, guaranteed term, no medical exam term, mortgage protection term, or really almost any kind of term life insurance that you could imagine.
Take a few moments and use our cutting edge life insurance quote finder to compare top online term life insurance quotes from multiple life insurers side by side by requesting free life insurance quotes now!
When To Purchase Term Life Insurance Coverage
Term life insurance is very important for anyone that has someone that depends on them to carry. In fact, the younger you are when you decide to get it, the more affordable it is.
All types of life insurance are based on the statistics of the likelihood the benefits will get paid out. Term life insurance is for a set number of years.
Statistics say that the older you are, the more likely you are to die, therefore the cost of term life insurance policies can vary widely depending on the age of the insured.
Comparing Term Life Insurance And Whole Life Insurance
While life insurance protects your loved ones in the case of your death, there are differences between the two major types of coverage. It is important to understand them both in order to make the best choice.
Term Life Insurance Facts
- These policies are in effect for usually 5, 10, 15 or 20 years and benefits are only paid if a person dies within the term of the policy.
- Term life tends to be much less expensive than whole life.
- The money paid for premiums is lost unless the policyholder dies during the term. There is no cash value on a term life policy.
- Term policies can often be converted or renewed, with little problem, when the term ends.
Whole Life Insurance Facts
- Benefits will be paid out, because the policy is in force until your death, provided you continue to pay premiums.
- You can borrow money against the value of the whole life policy, because there is a cash value on it.
- Premiums usually remain steady throughout the policyholder’s life.
3 Types Of Term Life Insurance Policies
There are 3 different types of term life insurance that you should be aware of.
- Standard – With standard term life insurance, at the end of the term, the policy ends. If you are interested in continuing the coverage, you need to reapply and go through the same initial procedure with medical tests and such before being approved.
- Renewable – Having renewable life insurance means that at the end of the term, the policy can easily be renewed without having to reapply. Premiums will usually increase.
- Convertible – Term life insurance that is convertible can be changed into whole life or another type of life insurance at the end of the policy. Premiums will be higher.
Determining How Much Term Life Insurance You Need
Because life insurance is meant to protect those who survive you, there are periods of your life when you need to have much higher coverage than at other periods. For instance, if you have small children and you are the sole breadwinner of the family, you are at the highest point for needing life insurance. Should you die, your spouse would want to be able to continue to keep the entire family in a similar lifestyle to what they are used to. Therefore you should make sure there is adequate protection in place to allow for the costs of doing so and also for the children’s college costs.
If you are already retired, have no dependents and own your own home, you may want to carry very little or no life insurance. Basically, as long as there is enough money to cover funeral costs and any outstanding bills, then you are probably sufficiently covered.
An option that is increasingly popular amongst financial advisors is to suggest that young people taking out life insurance coverage for the first time use both types. It is smart to get whole life coverage when you are young because the premiums are much smaller and will remain small. The policy will also provide you with a place to borrow money should you need to, because cash value becomes available on whole life policies.
The amount of whole life insurance coverage that you take out should be no more than you seriously expect to need at the end of your life. An exceedingly large amount for an entire lifetime would mean too much money being tied up and you would be over-insured for a portion of your life. Financial advisors always suggest placing your money elsewhere than insurance if you are looking for an investment. With a smaller whole life policy, you can also purchase the lower-cost term life for the time in your life when you have children and big debts, to make sure they are adequately protected.
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