When shopping for any kind of insurance, it is easy to get bogged down with all the varieties and terms. Then there are exclusions and exceptions that need to be considered. There may even be a health and/or credit check. At the point that the premium costs come into play, it is enough to frighten anyone. He or she will ask, How can I determine how much insurance is enough? Or,What if I do not purchase enough coverage? Maybe even, What if I never need it?
Insurance, especially for policies not required by law or another entity such as home or automobile, may seem unneeded and a waste of valuable money that could be used in other tangible ways, is actually protection for one’s assets. Home insurance protects against the unfortunate events that may happen to a home. Automobile insurance protects not only the car, but the driver as well. Life insurance protects the lives that are left behind, in the event of the untimely death of the insured.
There are several types of life insurance available. However, the most popular and most affordable life insurance is term life insurance.
Understanding Term Life Insurance
Term life insurance is just what the name implies; it is available for a term, or period of time. The best time to purchase a term life insurance policy is at the point that someone else is dependent on your income. This could be just after marriage, or perhaps after the birth of a baby. Nonetheless, it is at this point that term life insurance becomes just as necessary as home or auto insurance.
The purpose of term life insurance is to cover the loss of income should the insured die unexpectedly. The most significant reason that this type of insurance inexpensive is because the insurance carrier does not expect to pay out any death benefits. The target age group to be insured are young in their career. More than likely they have expenses such as a mortgage, car payments, and children’s costs. By the time the term of the policy is up, these same people will be more settled in life; the mortgage and car are paid for, the children are grown, and they have money saved.
First steps to obtaining this type of policy would be to research life insurance quotes online or contact your current insurance provider. The agent can quote term life insurance rate plus any applicable discounts. Most insurance companies offer multi-policy discounts for customers, thus some savings are found by having all policies with the same insurance carrier.
Even with a quote from your current insurance carrier, the second step would be to shop around with other insurance companies and obtain a term life insurance rate comparison online. There are calculators online available to pull the information from the top insurance providers. This will save time from contacting individual insurance companies to simply get a rate quote.
Selecting from Many Life Insurance Choices
Once you can start to narrow down the choices, make sure to read all policy information carefully. Some policies could have certain exclusions that would eliminate the beneficiary from collecting the death benefit. One such example may be death from a work-related accident. Other polices may only have the low premiums for a short term such as ten years. At the end of that ten years, the premiums could double or even triple.
Most companies will not write a term life policy for someone that already has a serious, life threatening pre-existing condition such as cancer.
Exclusions on most policies that would prevent the payout of a death benefit:
1. Suicide
2. Felonious acts
3. Drug overdose
4. DUI
Another benefit to online term life insurance rate comparisons is knowing what can happen at the end of the term. Because term policies are aimed towards younger people, for those that did not use the death benefit, the face value of the policy can then be rolled over into another insurance product, such as whole life insurance without any health checks or other exclusions that would apply to someone of an advanced age attempting to purchase the same product.
Remember to shop around. Use the online searches to find free life insurance quotes to help you compare multiple policies quickly and easily from various companies. Use keywords such as, “quote term life insurance rate”, “online life insurance compare”, to find the policy that fits your financial needs.
For a married couple, it is wise to purchase a term life policy for each spouse. Even if one spouse does not work, a term life policy has its benefits. Questions to consider:
1. Do I have at least $10,000 set aside for funeral expenses?
2. How will my life change should my spouse die? Will I need to pay for child care?
3. Do I have a year’s salary saved in case I need to take a leave of absence?
If you or your spouse does not work because he or she is caring for a child or other family member, he or she may not be physically adding to the household finances, but the work that is done around the house has a value just as a working salary. Should the non-working spouse die suddenly, the face value of his or her death benefit will aid in paying for funeral expenses as well as other expenses that could arise as a result of the death, depending on the exact amount of the policy purchased.
No one wants to think about what-if, but after-the-fact is too late. Food, clothing, and shelter are essential to all humans. Term life insurance can provide your family the means to continue should the unthinkable happen.
