Term Life Insurance Articles
What You Should Expect To Pay For Term Life Insurance And Why
2010-02-23
It's difficult to compare term life insurance quotes if you're not sure what you should actually be paying. Unfortunately, there's no "average" cost for term life insurance. Premiums vary greatly from age group to age group, between the sexes, and can greatly fluctuate due to a number of factors such as family history, overall health, and more. Still, it's reasonable to want a grounded number to compare to a term life insurance quote, and assessing your situation and coverage needs can make it easier to shop around and find a working policy at a reasonable cost.
The first step is to determine a suitable amount of coverage, and a surprising number of policy holders completely skip this step. You don't need to buy enormous amounts of coverage, as this unnecessarily drives up term life insurance costs, and of course you don't want to buy too little coverage, or your policy won't work as planned after you die. Generally, it's a good idea to plan for funeral costs and a few months of living expenses for your beneficiaries, then add about 10% to that number to account for inflation. You should also consider the length of the policy you buy, and recognize the link between cost and policy length. You'll pay quite a bit more for a 30 year term life insurance policy than for a 10 year policy, and for many consumers, the 10 year policy is perfectly suitable (especially if you're planning to get another form of life insurance at some point in the future).
Once you've decided on the type of policy that you're going to buy, use a reputable term life insurance quote comparison website to determine the average cost for your own situation. You'll often be asked questions about health, family history, age, etc.--this helps to ensure accurate quotes. Average out the quotes from four or five notable life insurance companies. You can use this number as a quick comparison when looking from quote to quote. If a quote is drastically under your average, beware. Exclusions and other terms might make the policy less than valuable.
A term life insurance policy is a big purchase, and you should take your time when looking at different quotes and considering the advantages and disadvantages of each policy. You shouldn't necessarily buy the cheapest policy that you can find. Make a measured decision, and take into account the history of the insurers you're looking at, consumer reviews, and more. Using your "average" cost when comparing quotes can help you quite a bit, but using common sense will get you much farther.
