If you have been putting off buying term life insurance, one of the most significant reasons may be related to cost. Many people live on a tight budget, and they believe that they cannot afford to pay the high cost of a life insurance premium. However, term life insurance is cheaper than you think, and a closer look may reveal that now is a great time to compare costs and to set up the coverage that you need.
Factors That Affect the Cost of Term Life Insurance
In order to understand why term life insurance is cheaper than you think, you should explore the many factors that contribute to the cost of term life insurance. Term life insurance is appropriately named because the coverage remains in effect for a predetermined term length. The life insurance company reviews many factors in order to determine their overall risk associated with insuring you. As you might imagine, their exposure to this risk is lower if you purchase a policy with a shorter term. Therefore, you will notice that your premium cost is lower if you opt for a 15-year term rather than a 30-year term. However, even coverage with a longer term is still affordable in many cases. Other factors that affect the cost of term life insurance include:
- Your age at the time when you purchased the policy
- Your health status as determined by a physical and a medical questionnaire
- Lifestyle factors, such as smoking, drinking and drug use
- The death benefits that you selected
- Your occupation
While some people present a high risk to insurance companies across all of these factors, most people may present a low risk in most or all of these areas. The best away to determine the actual rate that you may receive is to compare estimates from different providers, or even better, get a qualified and expert life insurance broker or agent to shop around and do the comparisons for you.
Why Many People Overestimate the Cost of Term Life Insurance
Some people are astounded by how affordable term life insurance actually is after they take the time to request an estimate. This is because many people overestimate this cost for numerous reasons. For example, they may have heard how much their friends or relatives are paying for life insurance premiums. These individuals, however, may have many more high-risk factors than you have. In addition, they may have requested different coverage benefits. Perhaps their premium is for permanent life insurance rather than term life insurance.
You may have also seen television commercials or received promotions in the mail that provide you with a rough estimate of premium costs, but you may have not read the fine print. For example, some of these ads may be for life insurance for senior citizens, which may be much more expensive than coverage for a young adult. Rather than assume that life insurance is too expensive for you to manage, it is best to research the actual cost based on your unique factors and needs.
Reasons to Buy Life Insurance
Because term life insurance is cheaper than you think, it makes sense to set up the coverage that you need as soon as possible. The most common reason why people purchase life insurance is to provide for loved ones after their passing. Unfortunately, death is an inevitably for everyone, and it can occur at any time. By purchasing term life insurance today, you can feel comfortable knowing that your loved ones will be taken care of financially after your passing. Because life insurance rates generally increase as you get older, buying coverage today enables you to lock in a rate based on your current age, lifestyle factors, health status and more. Essentially, it may be much more affordable to buy coverage today than it is to buy it in a year or two.
Term life insurance can be used to pay for funeral or burial expenses, also known as final expense life insurance medical bills that you leave behind, significant debts that your spouse or family members may otherwise be burdened with and more. If you have children, death benefits may also be used to pay for their college expenses if you pass away and are unable to contribute financially through your regular income. Some people also purchase life insurance to supplement retirement income for a surviving spouse. After all, your retirement plans may require both of you contributing to the plan for the next decade or two. Death may leave the surviving spouse scrambling to fund retirement on his or her own if life insurance benefits are not available.
The unfortunate reality is that your loved ones may be faced with financial hardship in many ways when you pass away. You have some control over the cost of your term life insurance by adjusting the term length and death benefit amount. With this in mind, it makes sense to begin exploring the options today and setting up policies that can benefit your loved ones in the future. Find a life insurance agent online with us today and get the policy that you need in no time at all.