subject: Term Life - An Affordable Option [print this page] One of the most popular kinds of life insurance is also the most affordable, Term Life Insurance. With Term Life you have the ability to choose the amount of life insurance that your family would need in the event of your death. Then you purchase that amount of insurance; the rates are based on many factors over a certain period of time. If you outlive the length of the policy, it simply expires and you receive no settlement.
The price you pay for the premium on Term life insurance depends upon many factors. The first is the amount that you would like to receive in case of an unexpected demise. The mortgage on your home, regular bills that must be paid every month and the anticipated costs of raising your children are some very important considerations. Most guidelines suggest multiplying your annual take-home pay by 5, but that's probably low when considering your family's growing needs and the cost of inflation.
When you fill out the application provided by the insurance company you may be surprised at the number and kinds of questions they will ask. They'll want to know your age, of course you'll expect that. There will also be questions about any pre-existing medical conditions and family medical history which can definitely affect your rates. One thing to remember, you must always answer the questions truthfully, within most policies there's a clause that allows the company to access your medical records. If you haven't been honest they will be within their rights to deny coverage or refuse settlement on a claim. Another factor to take into account is your height and weight; statistics prove that leaner, healthier individuals are a better risk for the insurer.
Shopping for a life insurance policy can be daunting, but not impossible with some determination. Sometimes the best option is to hire an independent insurance agent to search the many choices and then give you several companies from which to choose. There is always a 'terms and conditions' section that lists 'key facts' about the policy. Take a good look at this, it will tell you what is excluded from the policy, and that's often the most important part of the document.
The two most common forms of Term Life Insurance are Level Term and Decreasing Term. Level Term means that throughout the term of the policy you will pay the same premium every month. Decreasing Term is also called 'mortgage life insurance'. You usually pay a predetermined rate and it provides a death benefit that decreases at a predetermined rate over the life of the policy. If the owner dies during the insured term the mortgage would be paid off. You can take out this kind of insurance as a single policy to cover the balance of a mortgage or as a joint policy for a first or second death. In the case of a joint policy, this can be the most cost effective option.
