Pricing on Term Life Insurance
If you are in the market to buy a term life insurance policy you may have some questions about the coverage, including "Does the Premium Remain the Same?"
It’s a very important question and one you should get answered before making your purchase.
Why? Because, you don’t want to be surprised if your premium go up next year or in 5 or 10 years. One of the most important factors in choosing life insurance is the Cost.
We all need to Budget these days and having a premium you can count on to remain the same today and in the future, means you can budget for your life insurance policy and not have to cancel your coverage in case your financial situation changes.
How Do Premiums for Term Life Insurance Work?
Premiums for term insurance are based on the type and amount of insurance you purchase.
In addition, your age, gender, lifestyle, tobacco use, occupation, hobbies, family health history, driving record, and height-to-weight ratio will factor into the cost of your policy.
Types of Term Life Insurance
Here are some Common Types of Term Insurance plans:
Most Popular Type of Term Life Insurance
Level term plans have fixed premiums for the entire duration of your policy.
By far, the most commonly purchased type of term insurance is level term life.
With level term, you select a term (duration) for coverage and you pay the same amount of premium each year for the length of your term.
Level term policies usually offer coverage for a term of 5, 10, 15, 20, 25 or 30 years.
The longer your term, the higher your annual cost of coverage.
What Happens When My Term Life Insurance Ends?
If you’re alive when your term policy expires, you will no longer have life insurance.
However, you may choose to renew your term policy for an additional term, usually up to 10 years is available for renewal policies.
However, your premium for the renewal coverage is based on your age at that time. But, you will not have to take a medical exam to qualify for the renewal term life policy.
Or, you could choose to go without life insurance coverage if you no longer have a need for protection.
Another option is to buy a new life insurance plan, but you may be required to take a physical exam, depending on your age and the amount of insurance you need.
Fixed Term Life Insurance Explained
Life insurance with fixed term coverage will pay a death benefit to your beneficiaries if you die within the term of your policy. Terms can range from 5 years to as long as 30 years depending on your specific life insurance needs.
Level Term Life Insurance Explained
Level term is a term life policy that keeps your rates foxed for the duration of the term period.
This means if you get a 15 year term policy, your rate would stay locked in for 15 years from the date of approval.
This is a good type of coverage to get while your kids are growing up or while you’re paying your mortgage.
It is also one of the most affordable life insurance plans out there.
Level term policies range anywhere from 5 to 30 years on term length.
Example of Level Term Coverage:
Basically, if you’re a healthy 35 year old male and you were approved for 20 year term at a monthly premium of $32, then you would pay that monthly until you’re 55 years old.
Or until you no longer desire the coverage. After that period, your premium would renew annually at your new age, which usually causes rates to increase quite a bit after the initial policy term.
If you want to avoid this, then you can make sure your policy includes the ability to convert your coverage to a permanent life insurance option.
Term Life Insurance Premium Quotes
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