Main Objective of Term Life Insurance
The main objective of term life insurance is to provide protection to the beneficiaries of a person in case he dies while the insurance is in effect. As such, the insured person himself is not really benefited because by the time the cash out payment is awarded he has already passed on to the other life. Term life insurance serves as guarantee that the family of the insured person will receive due financial assistance so they can meet their needs. This type of policy is very helpful especially for heads of families where there are young children as dependents. With the demise of the father, mother or whoever is responsible in providing the basic necessities of the kids, a void is created that needs to be filled with an insurance benefit.
Determining Premium Rates
Life insurance is not part of the everyday needs that has to be prioritized. Nonetheless many families perceive it to be an important element of survival in this world. And because it plays an indispensable role in many households, people are looking at ways on how to avail of even lower term life insurance premium rates. Generally, the amount of premium payments depends on the face amount of the policy itself. Therefore if you apply for a term life insurance, which has a million dollar value the rates are naturally higher than when you will avail of a plan for $500,000. Likewise the rates are also based on the age, health and living and work conditions of an individual.
Younger people are charged with lower fees than those who are in middle or senior age. The older a person is, the higher the premiums go. In as far as health condition is concerned an individual with diabetes or hypertension will likely be required to pay additional fees apart from the basic premiums. This is very true especially with whole and permanent life insurance policies. However with term life insurance, medical interview may be waived especially if the person looks healthy enough to merit an insurance coverage. On the other hand, the work and living conditions of a person are also considered in determining his insurability. If you live in congested city dwelling areas or ghettos for instance, the policy granted to you will most likely have some riders in it because of the high living risk in your dwelling vicinity. Moreover if you are a soldier, a pilot, or a truck or bus driver, careful consideration is given regarding the hazards that go with your occupation. Again, under these circumstances, riders and additional premiums may be attached to your policy.You cannot exactly calculate how much you are really going to pay for your insurance or any type of policy for that matter. Many policy holders are confused on how the fees are determined and most of them do not bother anymore to find out because it seems only an insurance agent can truly understand the concept. It must be noted however that no insurance fees are too high for someone who can afford to pay. But with regard to those who can barely meet their policy requirements, every cent added to their premiums matters much to them. The only assurance they can get perhaps, is the thought that if there are extra fees to be shouldered, the same will redound to the benefit of their loved ones. But if you are one person who wants disclosure and transparency on everything, you might as well ask your insurance representative to show you how the computations are done in order to come up with the current premiums you are paying.
Comparing Term Life Insurance Rates
Before signing any insurance policy proposal, it is best that you learn more about the various term life insurance rates offered by different insurance companies. Scouting for the best insurance premiums is very similar to scouring around the stores when you are shopping for clothes. You always want to have the best buy at the most affordable price. You want to get the most out of your money from that little dress on the shopping window in the same way that you want to get the ultimate benefits for your beneficiaries from your term life insurance plan. Learn therefore how to compare insurance rates by following the given suggestions.
- Know the different insurance companies in your area. Inquire about their status, prestige and length of time that they have been in the industry. If you know people who have policies with said companies, interview these individuals and get their feedback about the reliability of the company. Remember that even if the premium fees are low if the company offering the policy is not credible enough, you may end up losing rather than gaining.
- Find as many term life insurance quotes as you can online. There are many sources on the internet as insurance companies maintain their online presence through their websites. You can browse on the sections of Frequently Asked Questions or Premium Rates.
- Go to the premium rate tables and note down the offered fees along with the type of plan. You may print or write down the figures on paper so you can compare them well later on.
- Compare premiums, types of policies, benefits and other terms based on the same type of policy or plan. For example, if you go over the premiums for term life insurance with one year period for a particular age group from one insurance company website, be sure you look for the same criteria on the next website you visit.
- Compare. Ask your insurance agent to give you copies of the policies available with his company and use the matrices in comparing rates from those with other insurance groups.
- Ensure that the insurance company you opt to transact with is credible and has good reputation among its clientele. It is very frustrating and even infuriating if you bump into an insurance agency that has bad record in the business. To warn you, there are fly by night companies who pose as trustworthy agencies at the onset only to end up depriving the beneficiaries of their clients from the benefits that they are supposed to enjoy. Such entities must be reported to the authorities that have jurisdiction over this matter.
Lower Rates May not be the Best
People are so keen in availing of term life insurance plans with very low premiums. Of course if you can enjoy such wonderful offer, why not? However you must also realize that if a term life insurance goes with low premiums, it does not always mean that it is the best choice. You must also consider the quality of benefits and services that go along with individual policies. No two policies are alike. Every plan offers a different package and benefit. In choosing the right policy for you, always think of the maximum protection benefit that your family can enjoy. As said beforehand, the higher the face amount, the more expensive the premiums are and the bigger the amount that is due to be paid to your family in the event of your death. It is a matter of proportionality that is true in every venture. The more capital you invest, the bigger the profits that you reap.
It does not mean however that just because you want your loved ones to get the most benefit from your policy, you will go for the most expensive plan. The wise thing to do is to invest on a plan that you can afford to pay. If you aim for a type of term life insurance with high face value and with higher premiums and yet the price is quite prohibitive on your part, drop the deal. The rule on not spending way beyond your means applies with insurance policies too. Otherwise, if you insist on availing of a policy that you can hardly afford to pay, you might not be able to sustain the payments and everything will go to waste if you cannot settle the fees and the plan expires as a result. In the end, you lose even the previous premiums you have contributed because they are no longer refundable. The best advice that you can heed therefore is to be prudent. Obtain an Insurance Policy for the sake of your family and dependents but do so with much care so everybody will enjoy the benefits.