AFFORDABLE TERM LIFE INSURANCE QUOTES

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Understanding Affordable Term Life Insurance


There are many commercials that pop up on television and radio promoting the value of getting an affordable term life insurance quotes. Now, most people have a clear understanding of what a term life insurance quote entails. However, they may be unaware what the concept of term life insurance centers on. For those that may have a number of questions regarding this form of coverage, the following is a brief overview of what it entails.


As with other forms of life insurance, term life insurance centers on offering a “death benefit.” That is, when the insured dies the beneficiaries will be paid a settlement amount based on the amount of coverage that the insured purchased. Again, this is standard with all life insurance policies. However, term life insurance is different in one respect. Specifically, term life insurance only provides coverage for a certain designated period of time. This timeframe is, of course, the term mentioned in the title of the coverage.


In short, the coverage is purchased for a specified term. When the term expires, the insured has the option of purchasing a new policy. In some instances, it may be the exact same policy at the same price. In other instances, it could be a new policy at an increased price or different terms. And, of course, the insured could also downgrade the policy for a lower premium. Really, this is the major benefit of purchasing a term life insurance policy. A person can save a lot of money on the purchase of a policy since the policies are being purchased in fixed terms.


This makes term life insurance perfect for those that may be on a proverbial budget. Anyone looking to make sure their family is properly covered in the advent of an emergency can take out a short term policy at a reasonable cost. That alone is a huge endorsement for term life insurance.

Fact File: Life Insurance

Life insurance helps your dependants to be financially secure in the event of your death.

When you buy life insurance you stipulate the figure you want the policy to pay out when you die ' this term is the sum assured. The premium you pay is based on this amount, and on your age and gender.

Your payments will also be based on the type of cover you choose. There are two fundamental types of life insurance: term assurance and whole-of-life cover, and there are many variations within these categories.

Term assurance is often purchased at the same time as a mortgage, and usually covers the same 25-year period. If you haven't died at the end of the period, you don't get anything back. It is a simple insurance with no element of investment which protects your family by paying out a lump sum should you die within a specific time period.

There are several types of term assurance. Level term gives the same payout during the whole of the life of the policy which means that you beneficiaries would receive the same amount whether you died on day one of the policy or whether you died right at the end of the term. It is usually bought with an interest-only mortgage, where the debt only has to be paid off on the final day of the mortgage term.

Decreasing term assurance is where the payout reduces by a set amount each year, finishing at zero at the end of the term. Since the level of cover declines during the term, premiums on this kind of insurance are cheaper than on level policies. This cover is usually taken out with repayment mortgages, where the debt occurs during the mortgage term.

Increasing term assurance means that the potential payout rises by a small amount each year. It is a good way of protecting the original policy amount against inflation.

With convertible term assurance, the policyholder has the choice of switching to another type of life insurance for instance a "whole of life" or endowment policy in the future. I f a person does take up this option; they do not have to submit any further medical evidence.

Instead of paying a lump sum, family income benefit gives the policyholder's dependents regular payments from the date the policyholder dies to the end of the policy term.

Whole-of-life insurance consists of a policy that lasts throughout your life. This means that your dependants are guaranteed to be paid whenever you die. Premiums are considerably higher than for term assurance since you are certain to die while holding the policy.

There are various types of whole-of- life policy ' some offer a fixed payout from the beginning, others are tied to investments, and the payout will relate to their performance. Unit-linked policies are the most popular investment-linked policies usually tied to funds, and with-profits policies, which give bonuses.

Whole- of -life policies are usually reviewable, often after 10 years. At this point your insurer can decide to increase your premiums or lower the cover it offers.

Life insurance can be bought on-line or from the high street through insurance companies themselves or from some friendly societies. Many sell directly to the public. Other outlets selling insurance include comparison websites, banks and building societies and mortgage brokers.

Factors affecting monthly premiums include the sum assured, sex, age and whether or not you are a smoker. Some companies insist on a medical before offering cover, but this is not as common as in the past.

Premiums for life insurance alter over time, and if you do have a policy it might be worth shopping around to find out if you can get a more cost-effective deal. You can normally cancel your existing policy without penalty ' but make sure you have another one in place before you do so.


About the Author:

Michael Challiner has 15 years experience in financial services marketing at senior level, the last 5 of which specialised in online marketing. Prior to that he spent 15 years in advertising with two of the world's top advertising agencies, J Walter Thompson and Saatchi & Saatchi.Get great deals on Life insurance from The Life Insurance Guard. Please visit our site for helpful articles on Life Insurance. Visit Brokers Online to benefit from its extensive article library covering most areas of uk finance.They also offer Life Insurance Quotes, Mortgage Quotes and much much more all online.

Michael now works as the editor of Brokers Online on behalf of Alliance Internet ltd Health Insurance

Author: Michael Challiner
AFFORDABLE TERM LIFE INSURANCE QUOTES