How to Select a Term Life Insurance Policy

Term life can be described as an insurance product that gives the insurer coverage for a specific or limited duration of time. It is one of the most affordable forms of insurance policies available in the market. So how do you effectively select a term life insurance policy?

This form of insurance is usually purchased for a period of ten to thirty years where the insurer has to pay premiums at the same rate for the entire duration. The coverage will cease upon expiration of the term and this is one of the reasons why the rate is lower in this form of insurance.  The person will also not receive money at the end of the term.  The proceeds can be transferred to the next of kin in the event of the insurers death.

Once the term expires the investor is invariably left with a couple of choices:To let go of the policy or go in for a renewal that requires higher levels of premium payments..

There are several benefits to a term life insurance policy. It is one of the most easily affordable insurance policies available and the investor can get to specifically choose the kind of services he or she would like to have. This would help to reduce costs  in the long run which makes it a very good option if you are low on funds or have to live on a strict budget.

There are several factors that you need to consider while going in for a term life insurance policy. Here is a look at some of them:-

Analyze your life history and the services that you require from the policy. Factor in aspects like age, occupation, salary, budgetary requirements, long-term planning, family history and your overall health.

Figure out if this package is meant for a short-term basis or would be followed for a longer duration of time. Also plan for long term, post retirement when you need a sizeable source of monetary support in the form of medical care..

The right time to buy a term life insurance policy

Decide at which stage of life you would be going in for a more comprehensive form of coverage. If your term life insurance policy were to expire when you are aged 50, any other policy would be a lot more expensive than when you were 15 years younger. Also take in to account the rate of inflation when your policy is due for expiration.

If you have planned for a renewal, set aside your resources to cater for that. The maximum period up to which term life insurance can be renewed stands at around 30 to 35 years.

Make it a point to compare the prices of the policies offered by the various insurance companies. Many companies tend to use different business models when it comes to calculating formulas and determining risk factors. To do that they assess the insurer and take in to account factors like sex, age, occupation, overall health, lifestyle choices, marital status and other data to estimate the possible cost to the company.

The insurance company you approach should enjoy a good degree of goodwill from the public and governing authorities. To do that look at the financial standing of the company in the market and notice how it performs. The better the company the higher the chances that the you will get paid.

Smokers generally have to pay more than non-smokers while acquiring a term life insurance package. This is because close to five million people are known to die due to smoking related diseases such as heart trouble, cancer etc. on an annual basis. Hence a smoker would have to pay a higher premium than a non-smoker even if they belong to same age bracket.  The costs for coverage can also significantly scale up if the investor is known to suffer from any form of existing illnesses.

Preexisting conditions can make it tough for patients to acquire many kind of health policies and term life can be used to help those people who were rejected health products on those grounds. Also if your existing condition has been addressed, the company can be contacted to lower the rate of premiums that you would have to pay on an annual basis.

There are different forms of term life insurance policies available in the market.  They vary widely in their scope of services, duration of coverage and pricing. Make it a point to study in detail all the policies that fall under this scheme and make an informed decision based to that effect.

One of the simplest forms of term life insurance is the annual policy, which is one of the most affordable types of insurance. This term life insurance policy expires at the end of the year. This can come in handy if you are looking for a temporary policy that can look into your immediate needs.

Then there is also the guaranteed level term life insurance that is usually procured for a period of 10, 15, 20 or 30 years. The investor here has to pay a fixed annual premium to keep the coverage alive for the duration. It should be noted that the premium would be set higher the longer the duration of the policy.