Term life insurance is, by far, the cheapest form of insurance you can buy. However, even cheap insurance isn?t always good insurance. There are several things to watch out for when purchasing a policy. Making sure that you have your ducks lined up in a row before signing a contract will ensure you?re getting the best deal possible.
1) Talk to a real, live agent. In this day and age, it?s common to just skip the real, flesh-and-blood person and go straight to the Internet. The problem with this approach is that you don?t always end up with a policy that is consistent with your long-term financial goals. Don?t just brush this off as unimportant. This could really cost you big time when you?re older. Imagine buying a policy and paying just $10 per month, only to find out that you need additional coverage in 10 years at a higher rate and will be charged $15 per month for the additional policy. That would be a total of $25 per month. Not bad, but what if you had just purchased the additional insurance right from the get-go and paid $15 total for all the coverage you needed because you purchased the insurance at a younger age? That makes more sense, and that?s something a real human being can help you with.
2) Shop around. Tell your insurance agent to shop at least 20 different companies. That?s a lot of work, but it will pay off in the end. Some companies will price their policies in such a way so as to favor certain age groups. The only way to discover which companies cater to your age group is to collect many quotes and then compare them all. You may find radically different premiums for the same basic coverage. As long as all of the insurers you?re shopping with have similar financial ratings, you should choose the lowest premium out of the bunch.
3) Take advantage of banded rates. Life insurance companies don?t always advertise this, and many online quote engines never tell you, but insurers offer something called ?banded rates.? These rates are like discounts for buying in bulk. The more death benefit you purchase, the lower the per-unit cost to you. There are times when $250,000 of term life will actually be cheaper than $150,000 of coverage just because of the banded rate. Ask your insurance agent about these rates and whether any of the companies he represents offers them.
4) Pay annually. Premiums can be paid annually, quarterly, or monthly. However, insurers often charge you a fee for paying premiums monthly or quarterly. Fees are typically waived if you pay annually. This saves you money, and isn?t too difficult to manage since premiums for term life are low anyway. If you have the cash up-front, definitely consider paying your premiums in advance.
5) Don?t buy too much. Leaving banded rates aside for a moment, you can purchase too much insurance. Only buy enough life insurance death benefit to cover your current and future expected financial liabilities. Sometimes people get carried away with buying as much insurance as they can afford. Don?t be one of those people. The purpose of life insurance is to cover your financial obligations, not to make your beneficiaries wealthy. If that happens as a side-effect somehow, fine. Otherwise, don?t bother. Also, term life isn?t permanent insurance, so eventually you?ll lose the coverage. There?s no sense in paying additional premium for a temporary policy.
Tags: assurance insurace, health insurance, health insurance tips, healthcare insurance, life insurance, medical insurance
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