Term Life Insurance – Everything you need to know to get the best policy for your needs

If you have a spouse, children or both and their current and future standard of living depends on the money you take home each month, term life insurance is the best financial purchase you will ever make! For just a few cents a day, you can guarantee that if something unforeseen happens to you, their future is not assured.

The purpose of term life insurance

Nothing is simpler than term life insurance. In exchange for a fixed premium, the insurance company promises to pay your beneficiary (the person designated to receive the proceeds) the full amount of your policy.

This type of insurance does not build cash value. You simply determine how long you want the cover to last and pay the determined premium. The longer the term of cover, the higher the premium.

Here’s an example for a $100,000 policy for a 35-year-old male non-smoker:

A ten-year term policy is $7 per month, a twenty-year term policy is $9 per month and a thirty-year term policy is $13 per month

Here’s an example for a $100,000 policy for a 50-year-old male non-smoker:

A ten-year term policy is $14 per month, a twenty-year term policy is $21 per month and a thirty-year term policy is $36 per month

How long do you need life insurance?

Most people need coverage longer than they might think. Consider these reasons for buying life insurance and the right terms:

You have young children and you want to ensure that in the event of your premature death (isn’t all death premature?) their education will be paid for. In this case, a policy with a term of 25 or 30 years is best.

You have a mortgage on your house and currently you need both your income and that of your partner to make ends meet. Since most mortgages are of the thirty-year variety, I would look for a policy with a term of 30 years.

You and your partner are 50 and empty nesters, but you need both incomes to maintain your income standard, including saving for retirement. In this case, a term of twenty or thirty years is ideal.

Buy the least expensive policy you can!

Regardless of the insurance company, a $100,000 policy with a twenty-year term will pay $100,000 in the event of death. Since you’re not building cash values, it doesn’t matter which company you buy from. The only caveat is that you only want to buy from an insurance company rated “A” or better by AM Best. These are the companies with the strongest financial positions. On my website you can shop the rates of the best life insurance companies in the United States.

Shopping is critical as rates will vary significantly from company to company. Rates for a $250,000 thirty-year term policy for a 40-year-old female non-smoker with no physical exam can have monthly premiums as low as $24 with the cheapest insurance company all the way up to $36 a month with the most expensive insurance company. In all cases, the death benefit is identical. My suggestion is to buy the cheapest plan!

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If You’re Healthy – Change Plans and Save Money!

Rates for term life insurance have been falling steadily over the past thirty years. Just because you bought a 20-year policy five years ago doesn’t mean you can’t save or extend your coverage for the same premium by switching providers. Unlike cash value life insurance, you have nothing to lose by changing plans. But you can lose a lot of money by not switching. And in today’s economic world, we need to make our dollars work harder for us!

48% of Americans die without leaving life insurance benefits

While the fact that 40% of Americans die without leaving any life insurance payout is shocking, another 21% of Americans reported that a loved one died and did not leave enough life insurance. These statistics beg the question: Why wouldn’t an income-earning spouse or parent buy a life insurance policy to protect their dependent’s future?

A survey found that many people put off buying life insurance because they found it all very confusing. I have very good news for those people! Term life insurance is simple. You simply choose the number of years you want coverage, get some rates and then choose the cheapest policy.

Another reason many people don’t buy life insurance is because they don’t want to deal with an insurance agent. These individuals view insurance agents as little more than salespeople and no one wants to be sold. There is also very good news on this front. Due to advancements in technology, there are websites like mine where you can get a quote and sign up without ever talking to an insurance agent, unless of course you want to!

Term life insurance has never been so cheap

A 35-year-old non-smoker can get $100,000 worth of 20-year term life insurance for $9 a month. This same person can bequeath his family the same $250,000 20-year term life insurance policy for just $4 a month more.

So don’t put off protecting your family’s financial future.