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.

Term Life Insurance And The Cost Of Waiting

A term that's thrown around a lot with term life insurance is the "Cost of Waiting". What exactly does this mean and how is it important to your decision of when and how much to buy? Let's take a look at how life insurance pricing works and the critical impact that age has on this process.

Term life insurance is different from other types of insurance such as health in that the rate you pay throughout the life of the policy is based on how old you were when first enrolled. This makes sense since the the statistical probability of triggering life benefits increases as we get older. Age at the time of enrollment can be the biggest determining factor in how much term life will cost you. The key point is to calculate the cost over the life of the policy. It's best to look at an example to really understand how this works.

For example, if you are age 30 and planning to buy $500K for 20 years (let's say for a newborn child), the average premium for a given carrier/plan is around $20/monthly. That's $240 annually or $4800 over the 20 year term. Let's say you want to wait till age 35 to purchase the same type of coverage. Now the average cost is $5760. That's an increase of $1248 or a whopping 26%. On top of this, you did not have coverage for that 5 year year period and if something were to happen, you really lost $500,000 plus the $1248. The $500K is a little more important! This comparison is for two relatively young age bands. The difference in cost only increases as you get older. For example, the difference between a 35 and 40 year old would be $1440. This means you will have to either buy less coverage which may preclude you from taking advantage of price breaks that accompany certain dollar of coverage thresholds (such as $250, $500K) or you will have to buy it for a shorter period of time. You don't want to have to buy 10 years of coverage now and another 10 years (assuming you qualify based on health) 10 years later because you will pay a significantly higher amount based on your older age then. Plus, you do not have the full coverage during that initial 10 year period of time in case something happens.

The take away from all this is that you want to buy as much as you can at the earliest age possible. You don't want to buy too much and overextend yourself. It makes no sense to buy $2 million in coverage when you can really afford only(over the full term) $1 million. If you end up lapsing the coverage due to non-payment, that defeats the whole purpose of term life insurance. It's better to find an amount within your budget and lock in the rate at the younger age. This is clearly a case where procrastination and waiting can you cost you real money!

About the Author:
Dennis Jarvis is a licensed insurance agent concentrating on term life insurance. Shop, compare, and instantly quote multiple carriers with professional guidance and resources.

Author: Dennis Jarvis
AFFORDABLE TERM LIFE INSURANCE QUOTES