A few tips about term life insurance
David Mayer
Term life insurance is a simple way of protecting your dependents when you die. You pay a premium. If you die within the nominated term, the insurance company pays out. So what do you need to think about?
Well, life policies are offered everywhere as part of your credit card or loan packages, through membership of clubs and as standalones. As with any other product, shop around with your head fully engaged. Start with sites such as this obtaining free online quotes for life insurance. The more information you collect, the better. Find out exactly what premiums are required to produce a given amount of death benefit. Always compare like-for-like. Some insurers ask for monthly payments. Others go for quarterly, half-yearly or yearly. Similarly, companies usually offer terms from 1 to 20 years. Always get life insurance quotes for the same term.
Its never a good idea to meet with an agent or company rep unless you already have a written quote for the particular companies being touted. Always explore your options face-to-face knowing what the general market has to offer. Never ever sign a binding contract at one of these meetings. Always take time to think about your options before committing yourself.
When youre shopping around, always ask for a guaranteed renewable policy. Say you decide to start with a short-term policy of five years. This looks a good low-cost, affordable life insurance policy for someone young and without too many commitments. Make sure you have the right to renew as many times as you want and no matter how your health may have changed. Equally important, make sure your premiums are fixed during the lifetime of the cover and no matter how many times you renew. Remember premiums are low when youre young because you should live a good number of years. If youre renewing at market rates when youre older, your premium will rise significantly. Make sure you get the benefit of premiums already paid.
Dont go for anything fancy. You want a policy that pays the minimum amount you think your dependents will need should you die. You can always buy additional policies as inflation takes some of the original value away. Dont be tempted by policies that offer different levels of benefit depending on how you die. Finally, always check out the financial health of the company before you buy a life insurance policy from them. It would be unfortunate if the company had no money to pay out when you died.
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