How Can I Afford Term Life Insurance?
Filed under: Car Insurance News
Term life insurance represents the most simplified and cost-effective form of life insurance available. Term life premiums have dropped to a new all-time low, helping more families afford life insurance protection.
Term life insurance does not complicate things by adding in an investment component or cash-value component. This helps keep the premiums way down as well. Term policies provide level payments for coverage for 10 to 30-year terms in most cases. Additionally, the life insurance company cannot cancel the policy as long as the policyholder pays the premiums.
Can You Afford Not to Have Term Life Insurance?
Term insurance serves to protect a familys financial standing and assets if something should happen to the main breadwinner. At the very least, a term life insurance policy provides funds to pay for final costs for the deceased.
According to the National Funeral Directors Association, funerals in 2010 cost an average of $6,560 and the cost continues to rise. Compare this with the average cost of an adult funeral in 1960, of $708. The cost of a person dying has also become a larger percentage of our incomes over the years.
Additionally, term life insurance serves a few other important purposes. For the family left behind, insurance proceeds can pay off medical bills and other final costs. A mortgage can be paid off so the family will always have a roof over their heads.
Some of the proceeds of the policy can help the remaining spouse pay for the kids college and supplement retirement income. Not having life insurance to help meet these costs could set a family up for financial ruin.
Making Term Life Insurance Affordable
Term life insurance is the most affordable type of life insurance. The best way to make sure you get the lowest prices on term insurance is to buy early, since the younger and healthier you are, the lower your insurance premiums. For example, according to GEICO.com, a 40-year old male in good health can purchase $500,000 of term coverage with a 20-year policy rate guarantee, for $345 a year, or just under $29 per month.
The catch is this: term insurance is structured to cover you while you and your family are in the midst of paying a mortgage, funding retirement and other large costs. Term insurance is not meant to be kept forever to provide something for your heirs.
The insurance policy expires after a pre-determined number of years, usually 5 to 20 years, although Amica Life Insurance started offering 25 and 40-year term life insurance coverage in 2009.
Timing your term insurance purchase is important to make sure you have coverage for the right amount of years. Term life insurance policies can be purchased with a guaranteed renewal option, which is especially helpful for people that develop health conditions over time, because they will not need to take a medical exam to renew the policy.
However, the cost of the coverage will also increase. Many families offset this by saving money for retirement so that once the term policy expires, their own savings can take care of ongoing expenses.
Keeping Term Insurance Affordable
Term life insurance can be had for very low rates if you can purchase it through a group plan at work. Also check any clubs or organizations you belong to, as some of them may also offer group term life insurance.
In fact, according to LIMRAs 2011 Life Insurance Ownership Study, 53 percent of all U.S. residents have some type of life insurance, and in 2010, 56 percent of all workers in this group had group life insurance from their employer, an increase from 2004s 48 percent statistic.
Staying healthy at any age also helps you get the lowest term insurance rates. Maintaining a healthy weight for your height goes a long way towards keeping premiums down. Additionally, if you smoke, consider quitting as it will dramatically reduce your insurance rates over time.
When a person quits smoking he experiences many health benefits. Over time, a blood workup may reveal lower cholesterol and blood pressure levels which could place a former smoker in the preferred rate class only a few years after quitting smoking.
Work With Several Sources
One way to find the most affordable term life insurance is to shop, shop, shop around. Getting quotes on term life policies can be quite painless and quick, especially using the Internet and all of the online resources that provide quotes and other information.
It is extremely important to get several quotes from a variety of companies. Why? Because every life insurance company determines its own methods for assessing risk and pricing policies. In other words, the same person could get dramatically different price quotes for the same coverage from different companies.
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Posted on August 26th, 2011 by Andrew Gonzalez
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