Term Life Insurance – Is The Cheapest Coverage The Best For You?
Many internet searches reveal that you can get free term life insurance quotes and premiums that are up to 70% off. With so many options available, is it always in your best interest to get the cheapest life insurance coverage? And what does “up to 70% off your life insurance” really mean?
Cost effective term life insurance is simply basic life insurance that pays out a lump sum after your death. The premiums for these polices are generally low because the policies are like your house insurance; there is no cash value. There are two basic types of term insurance – decreasing term and level term, but decreasing term life insurance is gradually being phased out.
What is Term Life Insurance?
Level term life insurance policies are not as cheap as decreasing term but it will do a better job of protecting you. Both of these life insurance policies have many similarities. The reason for the different price structures are that level term policies, owned by you, can pay off your mortgage and still leave money for your family. The group term life insurance you buy through your bank, has a decreasing balance but the premiums will continue to increase as you get older. A decreasing term insurance policy starts out cheap and pays only the bank a lump sum to clear your mortgage; it doesn’t leave any money to pay those you leave behind.
Life Insurance – Mortgage Priorities
If paying off your mortgage is your priority, then you should look to level term. You might have a 20 year mortgage but a 10 year level term life insurance policy. As you will need to renew the life insurance policy at the 10th anniversary, you might want to consider making it a 20 year term life insurance policy.
Some Keys To Getting Low Term Life Insurance Rates
Non smokers pay half the cost of life insurance than smokers.
Sometimes losing weight can lower your premiums. If you are overweight, find out what weight will lower your premium.
If a health condition causes you to pay more for insurance – insist on being told the exact reason. Discuss the reply with your doctor to find out if it is accurate.
Remember the only way to find a low life insurance rate, is to find an independent life insurance broker who does the “shopping” to get you the best possible rate for your whole or term life insurance policy.
Also published on Medium.