When buying term life insurance, it is easy to compare life insurance quotes, policies, and rates from different companies. Although finding a cheap premium is important, price should not be the only factor determining the best term life insurance for you and your family. Because many term life policies exist, each with their own pros and cons, consumers should compare the contract coverage, features, terms and restrictions of policies offered by different carriers, as well as the reputation, strength, customer reviews and ratings of the companies themselves to find the product that best satisfies your needs and goals. In the following article, we will show you how to compare contracts so you end up purchasing the right policy, death benefit, and term period.
Choosing The Best
Some term life insurance policies allow policyholders to renew the policy at the end of the term without reapplying or undergoing another medical exam. Other plans allow you to convert to permanent whole life insurance. There are also term policies that give the insured the opportunity to alter the amount of the death benefit and premiums.
Because term life insurance can be a long term investment in the protection of your family should you prematurely die, consumers should compare plans and rates to find the best combination of coverage and low cost prices for their personal needs. See the following policies to get an idea of the types available to you should you choose to get life insurance quotes.
No Load – a term life policy that avoids upfront costs and fees, such as costs of underwriting, processing, the medical exam, and commissions. Consumers should, however, expect slightly higher monthly rates over the long term. Avoiding agents, brokers, and customer representatives by getting term life insurance quotes and buying a policy completely online can make your no load protection cheaper.
Decreasing Term – decreasing term life insurance coverage offers a decreasing death benefit over the course of the policy, resulting in cheaper premiums. This type is beneficial when coinciding with a business or mortgage loan or credit card payments (see credit life insurance). Because the principal is slowly being paid off, the policyholder will not require a full death benefit that covers the entire original loan amount, providing cheaper premiums as time progresses.
Guaranteed – guaranteed life insurance allows potential applicants to buy a policy without a medical exam from a doctor. Guaranteed coverage usually has certain terms and limitations, such as a death benefit up to $50,000 and the exclusion of paying out claims filed within a 2-year period of purchasing.
Level Term – level term life insurance is one of the most popular types purchased, offering fixed rates for the entire policy period, whether it be 10, 15, 20, 25, or 30 years.
Return of Premium – ROP term life policies refund all the premiums paid plus interest if you are still alive at the end of the term period. Since term life insurance does not offer a cash value or investment component, this lump sum payment of your premiums can act like the cash value of whole protection.
Instant – instant term life offers short term coverage when applicants need a small death benefit (usually less than $50,000) quickly and cheaply.
Renewable – because life insurance companies calculate risk based on age and health to determine rates, renewing an expired term life policy when you are older will result in higher costs. Renewable term life policies offer policyholders the option to renew without applying again and undergoing another medical exam. Because insurance companies can not deny applicants coverage and are therefore exposed to increased risks, premiums will renew at higher prices.
Convertible – convertible term life insurance, as mentioned previously, allows policyholders to convert a term life policy into permanent coverage. You have the option to convert to either whole or universal life insurance, each of which offers pros and cons.
Adjustable – adjustable life insurance offers policyholders the option to change their death benefit or premiums. Because how much life insurance you need changes with time, such as the addition of children to the family, fluctuations in income or salary, business loans, the purchase of a home, or medical bills, policyholders are able to lower or higher the amount of coverage, and thus able to change the cost of protection.
Consumer websites like AM Best and JD Powers offer rankings and ratings for major insurance companies based on certain criteria, including financial stability and strength, as well as customer service and reviews. While it may be more difficult to get information about smaller state or regional carriers, your State Insurance Department and Better Business Bureau can provide information on any companies in the state. Consumers can also request a company prospectus for information on financial stability.
Mutual and Stock Companies
The day to day operations of stock and mutual companies are almost identical, but mutual companies are owned by their policyholders and stock companies are privately or publicly held corporations owned by shareholders. Mutual companies may pay owners of certain types of policies dividends after the company pays out legitimate claims and still has cash/profit left over. Stock or public insurance companies pay dividends to stockholders who each own a piece of the company as shareholders. There are excellent mutual and stock carriers and both offer essentially the same types of life insurance, but some individuals may prefer one provider over the other.
How Much Do You Need
The last step before getting free, instant term life insurance quotes is to determine how much life insurance you need. Experts and financial advisers recommend families buy between 5 and 10 times annual income. Where you fall in that range is dependent on your individual assets and financial liabilities, such as your pension, savings and 401K accounts, mortgage payments, credit card bills, medical expenses, education costs, business loans, or any other financial obligations you may have. If you are not sure the amount you need, get a free price quote anyway to get an idea on the costs you may have if you get insured.
By getting multiple term life insurance quotes, consumers can comprehensively compare rates, coverage, policies, and carriers and have all the information they need before making a purchase. To get a quote online, you simply need to enter your zip code, choose a company, pick a death benefit, and complete a short form with rating information like gender, age, weight, occupation and basic health questions.
This basic information will tailor your contract specifically to your needs, getting you an estimate to comparison shop with. Since there is no limit on the number of estimates you may request, consumers can also compare the rates of different options, plans, and companies to learn about every kind of policy available in the marketplace.
Life Insurance Online
Once consumers have had an opportunity to review policies, providers and prices, and have made a decision on the one that addresses their needs, consumers can purchase contract online, though there is no obligation to do so if you are not ready. Some coverage will require that the insured person have a medical exam before the policy is issued, but the rest of the application process can be completed from the comfort of home, avoiding agents, brokers, and customer representatives. It is often cheaper to purchase anything online since there is no agent commission which may add to the cost of your monthly premiums.