Shopping for life insurance today can be somewhat more complicated than it was even just a few years ago. In the past, a life insurance agent would typically come to the home of an individual or a family, sit down at the kitchen table, explain the policy options and the benefits, and then provide the amount of the premium quote in order to obtain such coverage. Life insurance quotes online.
Today, a lot has changed – not only in the life insurance industry in terms of the vast array of different types of policies and plans that are available, but also in the world of technology and in how people are able to obtain their information.
Gone are the days when you need to even talk directly with a life insurance agent in order to discuss your policy or premium options, because now there is a great deal of information that is directly available via the Internet. Over the past several years, insurers have made obtaining information that is needed by consumers extremely easy to locate. Now, when you need to find particular details on life insurance coverage that is available, as well as how much it will cost, you need to do little more than simply log on to the Internet.
One thing that is important to keep in mind, however, is that it is still essential to ensure that you are purchasing the right type of coverage for your needs, as well as the amount of benefit that will be required by your survivors in the event of the unexpected. This is because having the wrong type of policy and / or too little benefit could still place those you love into financial hardship – at a time that is already very difficult for them.
This is why you still should consider working with a company or an agency that truly knows life insurance, as well as having a good basic understanding about the types of life insurance coverage that are available to you.
Types of Available Life Insurance Coverage
Today, while there are many variations of coverage, there are two primary types of life insurance that are available in the market place. These are term and permanent. Term life insurance is considered to be the most basic form of life insurance protection. This is because it offers just a pure death benefit option, without any other type of cash value or savings component attached.
Because of this, term life insurance is usually quite affordable for people to purchase – especially if the insured is young and in good health at the time of application. As its name implies, term insurance is purchased for a set term, or time period. These terms can usually be for 10 years, 15 years, 20 years, 25 years, or even for 30 years, depending on the underlying life insurance carrier.
Once the time period has elapsed, the term life insurance policy will expire – and, if the insured wishes to continue having life insurance coverage, he or she will need to either re-qualify for coverage or purchase another life insurance policy. At that time, because of the insured’s increased age, the premium on the new policy will usually be higher than on the initial policy. If the insured has developed any type of adverse health condition, it is also possible that they may not be able to qualify for a new policy.
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A permanent life insurance policy is different from term coverage in several ways. First, these policies provide both a death benefit component, along with a cash value, or savings, component. The cash in the cash value component is allowed to grow on a tax deferred basis, meaning that there is no tax due on the gain of the cash until the time that it is withdrawn. Over time, this can allow the cash to truly grow and compound exponentially.
The cash that is within the policy may be either withdrawn or borrowed by the policy holder for any reason that he or she wishes – including paying off debts, purchasing large ticket items, and / or paying for a child or a grandchild’s college education. Cash value that is borrowed or withdrawn is not required to be paid back. However, it is very important to understand that if the insured were to pass away while there is an unpaid cash value balance, the amount of such a balance will be deducted from the amount of the policy’s death benefit that is paid out to the beneficiary. This could have a big effect on the overall proceeds – as well as an ongoing effect on the beneficiary’s future lifestyle, depending on how the proceeds were going to be used. So, this is important to keep in mind.
Unlike term life insurance policies, permanent life insurance policies do not have a set time limit, and they will therefore never expire – as long as the premium continues to be paid. Therefore, regardless of whether an insured obtains an adverse health issue, he or she will remain insured with a permanent life insurance policy.
How Much Will Your Life Insurance Policy Cost?
Life insurance quotes are determined based on a number of different criteria. These include the following important factors:
The type of life insurance policy that you are purchasing is one of the primary criteria in how much you will pay for your coverage. In this case, if an applicant for coverage is relatively young and in good health, term life insurance policies are typically less costly than a comparable amount of permanent life insurance coverage. Over time, however, term coverage can become more costly.
Amount of Coverage
The amount of life insurance coverage – or the amount of the policy’s death benefit – that you are purchasing will also have a major effect on how much your life insurance quote will be. Here, the more death benefit you are buying, the higher the premium quote will usually be.
Applicant’s Current Age
The current age of the person who is applying for life insurance coverage will also make a difference in the price of the life insurance policy. In this case, the younger that the applicant is, the lower the premium will be. This is because one of the primary components that is factored into the price of life insurance quotes is a person’s life expectancy. Certainly, the older a person is, the shorter their life expectancy will be – and that makes them more risky to a life insurance carrier, which will in turn, prompt a higher amount of premium to be charged.
Health Condition of the Applicant
The health condition of the applicant will also be key in how much premium will be charged. Here again, because life insurance quotes are based in large part on one’s life expectancy, someone who is in good or excellent health will typically be charged less than someone who is in poor health. (Someone who has extremely poor health may be declined altogether from obtaining life insurance coverage, depending on the insurance carrier and / or the type of life insurance policy that is being applied for).
Applicant’s Occupation or Activities
In addition to the applicant’s age and health, there are other factors about the applicant that can also have a bearing on the life insurance quotes that you obtain from insurance carriers when comparing policies.
For instance, many insurance carriers will feel that it is risky to insure an individual who has a dangerous occupation such as a fire fighter, police officer, window washer, crane operator, and iron worker – just to name a few. In addition, applicants may also participate in hobbies or activities that insurers also deem to be dangerous such as sky diving, scuba diving, or rock climbing. If you fall into any of these criteria, it is possible that you may be required to pay more for your life insurance coverage – all other factors being equal – due to the increased risk that you present.
Finally there are activities that can have a direct effect on your health, like smoking. Most companies have separate tobacco rates that are just on life insurance policies for smokers and other forms of tobacco. If you can be smoke free for at least a year you can get back to the lower non-tobacco rates.
There are numerous riders that may be attached to life insurance policies. Oftentimes, these riders may be used to help “customize” the coverage to better fit a policy holders’ needs. Depending on the type and amount of riders that are added will be key to what the ultimate policy quote will end up being.