Who Should Get Term Life Insurance Coverage?
Anyone that is looking to provide income replacement for their family should consider purchasing term life insurance. Fixed rate term life insurance.
For those who have children in your own home, carry financial obligations, or own a company, term life insurance coverage might be a great (and affordable) resource to keep. Having a wife and three sons in my household, life insurance is a must.
Term Life Insurance Quotes
When looking for life insurance coverage, you can’t really make a price comparison in the same manner a shopper does in a store. Sure if you’re in good health, then getting a cheap life insurance policy is rather easy. If you have what is determined to be a high risk condition, the price of high risk life insurance coverage will be different based on your medical background and how risky the life insurance company views you.
Life insurance coverage companies will conduct their own medical exam and then compare their findings to what they find in your medical records usually referred to as your Attending Physician Statement (APS).
If you’re in a good bill of health, then in only a matter of seconds, you could have term life insurance coverage quotes from a large number of competing life insurance coverage companies.
What exactly are term life insurance coverage quotes? Quotes are prices that the insurance provider offers their applicants based on their risk class, the amount of coverage sought and for the term desired. On the quote form, you provide details about your personal insurability (health class, height, weight, age, sex), and also the insurance provider will respond by suggesting how high or low your life insurance rates are going to be.
Why is a term life insurance coverage quote not the same as a real offer? The most common reason is that the applicants health was not exactly what they thought it was.
For example, an applicant may think they are a Preferred Plus rating class, but the insurance company has certain underwriting guidelines they must follow. Some of the most common reasons we see an increase in price is from high cholesterol, high blood pressure or some findings on their medical records that they did not disclose in the phone interview.
What Term Life Insurance Quotes Are Based On
When applying for a term life insurance policy, there are some different factors that the insurance carrier’s underwriters will look at when determining the policy’s premium quote. These will include the following criteria:
Age – An applicant’s age can make a big difference in the premium quote that you receive. This is because, as you age, the price of term life insurance can become much higher over time. For those who are young, however, term life insurance can prove to be a very affordable way to obtain a large amount of life insurance coverage.
Gender – A person’s gender can also make a difference in the premium price that is paid for term life insurance coverage. On average, based on statistics, women tend to live several years longer than men do – and because of that, females will usually pay a lower premium price for term life insurance coverage.
Height and Weight – Height and weight is also an important factor when determining one’s term life insurance premium rates – especially weight as compared to one’s height. This is because obesity is considered to be a considerable risk factor when it comes to life insurance coverage. For those who are considered to be overweight, the premium that is charged will be higher than those who are not overweight.
Amount of Coverage – The amount of life insurance coverage that is being purchased will also factor into one’s life insurance premium rate. In this case, the more coverage being purchased, the higher the premium rate will be.
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State of Residence – Your state of residence can also play a part in the amount that you pay for term life insurance.
Smoking Status – One of the biggest factors in the premium rates for both term and permanent life insurance coverage is your smoking status. Those who are smokers can pay up to five times more for their life insurance. Smoking does not just include cigarettes – but also cigars, chewing tobacco, and other forms of tobacco usage. It even includes marijuana. This high premium price that is charged for smokers can be a blaring sign of just how much this particular factor is so risky to a person’s life expectancy.
Health Status – Most life insurance applications will require that the insured undergo a medical exam to determine his or her overall health status. This will usually entail the taking of a blood pressure and a heart rate reading, as well as a blood and a urine sample. These will be tested to ensure that the proposed insured is in overall good health and does not pose any risk factors to the insurance company in terms of a potential costly claim. There are no medical exam policies, but they tend to be more expensive due to the added risk
Driving Record – Over the past several years, many life insurance companies have also started to look at a potential insured’s driving record. This is because one’s driving record can also show whether a person may be a potential risk – especially if he or she has some traffic violations on their record in the recent past.
Lifestyle – When checking one’s lifestyle, the life insurance company will inquire about any type of potentially risky or dangerous habits such as skydiving, hang gliding, scuba diving, or race car driving (or other similar hobbies and habits) that the individual has, as these can pose risk of claim to the carrier – and they may be cause for a higher premium rate on your insurance coverage.
Length of Coverage – When evaluating term life insurance quotes, the length of the coverage will also play a part in the premium amount that will be charged. This is because term life insurance policies can be as short as one year (or even less, in some cases), and as long as 30 (or more) years.
Policy Riders – Many term life insurance policies will also include riders that will include or exclude various coverages. Because of this, the premium that is charged for the overall policy could be altered. Some common riders can include the waiver of premium, a children’s term rider, and / or an accidental death and dismemberment rider.
Which Term is Right For You?
Now that you understand the major differences between term and permanent insurance, it is time to decide what term length might be right for you. For individuals who have a short-term need, a shorter 10-year term might be sufficient.
For individuals who have just purchased a home or are in the process of having children, you might want to consider longer 20 or 30 year terms.
Most of the leading life insurance companies in the industry offer 10, 20, and 30 year terms. Sit down and really consider how long it will take to payoff your debts and how long your financial obligations will exist. This will help you choose the most practical term for your specific situation.
Why Some Quotes for Life Insurance May Differ From Others
When comparing two separate term life insurance policies, you may notice that – even with the same exact coverage amounts of each of the policies – the amount of premium that is charged to the policyholder could be quite a bit different.
This is because, what many people may not be aware of is that, while all insurance companies have some type of criteria for evaluating their applicants for coverage, these factors are not all identical. This means that the same applicant for coverage may apply for term life insurance at one life insurance company and obtain a certain premium rate, and he or she could apply for the same amount and type of coverage at a different insurance carrier and obtain a drastically different premium rate.
This is why it makes sense to shop for your life insurance coverage at more than just one life insurance carrier before making your final decision – as it could end up saving you a great deal of money over time.
One way to do this is to work with either a company or an agency that has access to multiple life insurance carriers. That way, you will be able to directly compare the policies, the carriers, the benefits, and the premium rates in a much easier and unbiased manner – and from there, you can then choose which policy makes the most sense for you and your specific needs.
Watch for the Insurer Ratings
When trying to find the most affordable term life insurance, it will also be important to factor in the insurance company’s rating into your overall decision. This is because, even if you find a low policy rate, if you are not working with one of the best life insurance companies, the company has a poor reputation for paying out its policyholder claims, or if it isn’t financially stable, then it might not be the right policy for you.
Insurer ratings can help in determining the financial strength of a life insurance company. There are several companies that offer such insurance company ratings. These include:
Typically, these insurer ratings are given in the form of a letter grade, with “A++” (or similar) being the highest. This means an insurer is strong from a financial standpoint and that it also has a good reputation for paying out its claims to its policyholders.
In order to find more information on a particular company and its insurer ratings, you can go to your state’s department of insurance website. You can also typically go to the individual insurer’s website. We do a lot of business with Banner, for example, but they by no means dominate the policies our clients purchase.
Another way to determine how well an insurer pays out its claims, as well as how it is regarding its customer service – and also how it is in its other areas of business – is to check the Better Business Bureau (BBB) information concerning that company. Here you will find a letter grade, as well as details regarding any complaints that have been filed with the company (and for what reason the complaints have been filed).
What Makes Term Life Insurance Different From Permanent Insurance Coverage
Knowing up front before you buy life insurance how different policies perform can be important. This is because you can use different types of life insurance coverage for various financial needs.
With term life insurance, you will be purchasing just the pure death benefit protection only. Typically, this type of coverage is considered to be the most basic form of life insurance that is available in the marketplace.
This is because there is no savings or cash value component – and because of that, the premiums that are charged for term life insurance are usually quite affordable, especially for those who are young and health at the time of application.
With term life insurance, however, the policy is purchase for a set period of time. This will oftentimes be for ten years, 15 years, 20 years, or even for 30 years. Policyholders can also purchase a 1-year renewable term life insurance option.
Typically, the amount of the premium will remain constant during the life of the policy. However, once the time frame has elapsed, the policy will expire and the coverage will no longer be in force.
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Therefore, if the insured wishes to remain covered by life insurance, he or she will need to re-qualify for insurance at their then-current age and health condition.
There are, however, some term life insurance plans that will allow the insured to covert the policy over into a permanent life insurance option – sometimes even without the need to prove evidence of insurability.
When an insured is required to re-qualify for term life insurance at their then-current age, the quote at that time will typically be much higher than it was on the original policy. This is because of the insured’s older age (and possibly due to any adverse health issues that he or she has also attained).
Where to Find Affordable Term Life Insurance Quotes
While some of the pricing factors on a term life insurance policy may be beyond your control, there are others that you will be able to have a say in – and for those, it will be important to work with a company that can help you in locating the policy and the insurance carrier that will be able to provide you with the best insurance protection for the most affordable premium outlay.
When you are ready to find the ideal term policy, we can help. We work with many of the top term life insurance carriers in the marketplace today – and we can assist you with obtaining all of the important information that you will require in making an informed purchase decision.
We can do so for you quickly, easily and conveniently – and all from your home computer – without the need to meet in person with an insurance agent.
Should you find that you have any additional questions regarding finding affordable term life insurance quotes – or even if you just have a question or concern about life insurance in general – our experts are happy to assist. In fact, we can even help with disability insurance. We can be reached via phone, toll-free, by dialing 888-836-7071.
We understand that finding the best, most affordable quotes for term life insurance may seem like a difficult task. There are a lot of variables to factor in – and you want to ensure that you are choosing a company that will be there for you when you need them.
But the good news is that you have an ally on your side. So, when you are ready to move forward, you’ll be working with someone who’s already done most of the shopping for you. So, contact us today – we’re here to help.