If you’re thinking about buying term life insurance, there’s a few key things you should keep in mind.
For example, what period length of term insurance should you buy and why?
These are very important issues you need to give some thought about before you buy a term life insurance policy.
Determing Type of Term Policy
The main question you want to ask yourself is why you want the insurance in the first place. The second question you need to answer is how long you will need it.
Term life insurance can be bought in increments of time such as 10, 15, 20, 30 years or it can be bought as being age specific such as when you reach age 65 for example. The first thing to remember is that term life insurance is relatively cheap to buy when you are younger.
The older you get, the more expensive it becomes. The premiums you pay when you choose a term remain the same for the life of the term.
So, if you’re thinking that you will start with a 10 year term policy for now, and will renew it later, it’s going to cost you a lot more when you renew than what you’re paying for it now.
How Long do You Need Coverage?
If you want to have a policy for a specific length of time, then it is best to buy the policy for that the entire length of that specific period that you need it.
For example, if you want to provide coverage to your family until you reach the age of retirement at age 65, and you’re currently 35 years old, you would best be advised to buy a 30 year term.
Another reason for buying a longer term life insurance policy, if that’s what you feel you will need, is that the policy will continue to be in force even though your health deteriorates.
On the other hand if you had bought a shorter term, and planned to renew just as your health deteriorated, you will likely not get the best rating and this will cost even more in monthly premiums.
Requirements for Policies at Certain Ages
When you’re young, and you buy a term life insurance policy, you will likely only have to fill out a medical questionnaire to not only get coverage, but to also get the best possible rating (assuming you are in perfect health at the time you fill out the questionnaire).
As you get older, the medical examination requirements of insurance companies become more stringent. They may require much more detailed information about your health. If you have a longer term policy, you don’t have to worry if your health deteriorates in the meantime because you are covered regardless and won’t face a lower rating or higher premiums.
Another scenario you might want to factor in when deciding on how long a term is the age of your children. You might be in your early twenties now, and if the children were just recently born, you might want to policy that lasts until they reach the age of majority. In this case you might opt for a 20 year term policy instead.
On the other hand, you might be buying life insurance in place of mortgage life insurance, which is required by the lender before they will approve your application. Most banks or mortgage lenders sell their own form of mortgage life insurance, but the beneficiary is the lender. The cost to get this type of insurance is much more expensive than what you pay for term insurance.
Term Life to Cover a Mortgage
Instead of buying mortgage life insurance, you have the option of buying term life insurance instead. If you’re outstanding mortgage is for $200,000, and is for 30 years, than you could buy a term policy for that amount and for a 30 year term.
The monthly premiums are actually a lot cheaper than what these lenders charge. Also, you name the beneficiary of your choosing so the proceeds don’t automatically go to the lender but rather to your named beneficiary.
If you do have health concerns and are thinking of buying term life insurance, your best bet is to use an independent agent like myself. If you go directly to a company or use a company agent who only represents one or a couple of companies, you aren’t going to find the best rates.
Not all insurance companies are the same, so an independent agent will be able to find you the best coverage and the best rates especially if you have a health concern, a weight problem, are a smoker, or have a questionable family health history.
If you need more information in deciding your reasons for term life insurance, how long a term to get, or have health issues, I suggest you give me a call because I can offer you some valuable advice and find you the best rates for your particular situation.
The best way to compare term life insurance rates is to use our quote form on the right and compare prices from over 30 top life insurance carriers.