Term Life Insurance QuotesFor many people, having a life insurance policy provides a method to protect family members in case of unforeseen circumstances. By requesting a term life insurance quote, the holder may select specific coverage that is in effect over a period of time. Considered to be the original form of life insurance, the typical policy structure holds no cash value and may be cancelled at any time. A buyer of term life insurance would normally be seeking pure risk protection, sometimes with fixed premium charges, and a predetermined award paid to a beneficiary in the case of their death.
Benefits of Term Life InsuranceBecause this type of life insurance covers a specific period it is considered to be less expensive than other types of protection. Very often an employer will offer their employees a basic policy with a face value dependent on the employee’s salary. The employee usually has the option to purchase supplemental insurance and to continue the premiums at their own expense if they leave the company or retire. Generally term life policies carry a lower initial premium rate than permanent life insurance policies because of the term limits. The policy often contains a renewal clause that may require an increased premium each year but typically reflects a maximum cost to the insured. The premium rates depend on the age of the insured, the term, and the face value and will be greater as each factor increases. Choosing a policy that includes fixed premium charges is the preferred and most affordable approach.
Where to Apply for a QuoteWriting a life insurance policy takes into account age, health and family history issues. Although numerous comparison charts are available through online sources, setting up a personal interview and quotation may be necessary. Most institutions require full health examinations before issuing a policy particularly if there are any questions about prior medical conditions. General information regarding cost and term factors can be found by applying online at several large insurance companies and financial institutions. An insurance broker will have a selection of quotes from various competitors.
Variables that Affect a Term Life Insurance PolicyTerm life insurance policies contain three basic elements: the face value (amount paid to beneficiary), the premium cost (paid by insurer or employer) and the term (period of effectiveness). These policies are also affected by the age of the insured with a rise in cost as the age increases. As a general rule, as the length of term increases, for instance from 10 to 20 years, the premium cost will rise significantly. As an example, a 60 year old man in good health might expect to pay about $880 annually for $500,000 coverage on a 10 year term. For the same term, $750,000 worth of coverage would cost approximately $1275 per year and a difference of $395. If he changes the term to 20 years, the premiums would be $1550 and $2300 showing a difference of $750. The same coverage amount for a 25 year term would be $3500 and $5500 yielding a difference of $2000. Obviously a younger man would pay less for his policy but as the life of the term increases, the premiums will also rise. In many cases, purchasing a term life insurance policy creates a means to protect a family or loved one from hardship if income is lost. As a growing family matures, it makes sense to reevaluate existing life insurance and to decide whether paying additional premiums makes sense. Certainly where children are involved providing for their security and education can be achieved by a simple term insurance policy. |
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