When Should I Buy A Term Life Policy?
Many individuals prefer a term life policy to the other types of life insurance that is available to them. One of the reasons is because the premium is low and the death benefit is high. This makes term life insurance very attractive for individuals of all ages.
The dilemma, however, is when to buy a whole life or term life policy and whether or not everyone interested in it will be able to buy it. There are some rules to be followed and this can affect when you buy it and whether or not you can at all. The good news is that most can, but may be placed in a certain risk category that affects premium.
There is one special requirement of a term life policy and that is the medical exam. The medical exam is necessary in order to establish the level of health of an individual. A person's health is going to have an impact on how much their premium is going to cost them.
The usual procedure is for a company that the insurance company is contracted with to come to your home to conduct a very basic health exam. This exam includes your height, weight, your medical history, your family's medical history, and a blood sample will be taken to test for such things as high cholesterol and other conditions that could affect your health.
Any conditions that affect your health can also affect your lifespan, so the insurance company wants to know what kind of risk they are taking. If you are low risk, you will be placed in a rate category reflecting this. If you are high risk, you will be placed in the appropriate category there as well. The risk the company is taking will be offset by the premium that you pay.
When to Buy
Those more advanced in age and in acceptable health tend to favor the term life policy because they feel as if they will not outlive the term. The terms can be anywhere from 5 to 40 years. A young person is more likely to outlive the term and then have to renew at the end at a higher rate. This is why the young person may benefit well from whole or universal life insurance because of the cash value the policies gain.
Nevertheless, anyone can invest in term if they would prefer the large death benefit that is paid to beneficiaries in the event of your death. If you are young, you may prefer to choose the longest term possible. Choosing a 20 year term may not be realistic because if you're 30, you are only going to be 50 in twenty years. However, if you are 60, you will be 80 in twenty years. Still, you may want to choose a 30 year term even if you're 60.
Premium and Death Benefit
A very unique aspect of the term life insurance policy is that the premium is usually quite low despite a high death benefit. It is not unusual to for a death benefit to be hundreds of thousands for a premium that may not cost more than $30. Again, the premium depends upon your health and even your lifestyle.
So if you're looking for life insurance that can do more than just take care of final expenses and you don't want to pay a lot of money for coverage, term life insurance may work. It's affordable and reliable. It also gives you peace of mind in knowing that your family is going to be taken care of if you die unexpectedly.