Life insurance is a personal choice and one that is sometimes confusing. It doesn’t need to be overwhelming.
There are so many terms when it comes to understanding life insurance. People have a tendency to get lost and frustrated, and then give up. For instance, how is term insurance different than life insurance, or is it? Fair question, and the answer is simply this – term life insurance, also referred to as pure insurance without the investment part, is a policy that offers insurance coverage for a designated time period and pays out a fixed pre-determined amount to a beneficiary should the insured unexpectedly die during the life of the policy. In terms of policy duration, you could choose anywhere from 10 years to 30 or more years, if that suits your circumstances.
Really, the goal of any life insurance policy should be to offer a guarantee that if an untimely death takes place, those left behind get a sufficient amount of money. Life insurance products ought to have lower premium amounts as well, and that is doable by purchasing a term plan. The main benefit of term life when you compare it to other kinds of insurance is that it typically pays out a larger amount for a smaller premium, which many buyers find attractive. Keep in mind, though, that term insurance does not accrue any kind of investment funds.
Before making the final decision to buy term insurance, there are a few things you should think about. First and foremost, compare the quotes you get from every insurance company you talk to about coverage. This is easy to do online and often you can compare prices instantly. Having said that, do not buy a policy based on price alone; consider the whole policy and what it has to offer. The bottom line is that you need a policy that covers you, not just some cheap policy. This is where you get told to read the fine print.
When filling out the forms for a quote, tell the truth on your application. If you do not and the error, omission, or lie is caught later, your insurance company will not pay out on the policy. This can have serious consequences, so take the extra time to fill it out accurately.
Another reason for reading the fine print is that you need to know precisely what is being covered and what you are paying for in the long run. Do not be enticed by bells and whistles and other add-ons that do not have any purpose for you, as it will only increase the premium. On a similar note, the younger you are, the cheaper your quote for a term life insurance policy.
While this may sound like common sense, stay as healthy as possible. If you live a healthy life, your policy rates stay lower. Do not excessively drink or smoke, consume massive quantities of junk food, or be a couch potato. Lose weight if you need to shed some pounds and maintain a healthy weight for your age. This is good, sound advice, that unfortunately many people do not follow, and then wonder why their policy premiums are higher. When in doubt about how to shop for term insurance, make it a point to connect with an experienced life insurance agent. They always have the answers to your questions.