How to Get a Term Life Insurance Policy

Term Life Insurance Policy

Having the proper amount of life insurance in the event of a tragedy is essential to your family’s well being. It’s among the most important things you could do for them. As the main source of income for your family, you need to make sure your family will be taken care of if something happens to you. Supplying their financial needs is your responsibility, so choosing the right type of life insurance policy is vital. It’s up to you to decide which insurance policy will work best for your family’s future; term or whole life. Following are few tips on how to get a term life insurance policy.

What Is a Term Life Insurance Policy?

A term life insurance policy is a written contract between you and an insurance provider in which you consent to pay an agreed upon amount of money in exchange for the promise of financial compensation to a beneficiary or beneficiaries when you pass away. If you were to choose a whole life policy instead of term life, that policy would remain in effect, as long as you continue to pay the premiums, until your death or you chose to redeem the policy for cash. With a term life insurance policy, there is a definitive ending date for the contract, at which time you would have to renew the policy for another term or opt for whole life coverage.Term Life Insurance Policy

Benefits of a Term Life Policy

One of the most important reasons for you to choose a term life insurance policy over whole life coverage is that term life insurance is much less expensive to pay for. Because the length of the policy is predetermined, insurance providers are able to offer coverage at reduced rates, which makes a term life insurance policy attractive to young married couples and single people just starting out in the workforce. When the policy runs out you will have to apply for another life insurance policy or go without coverage. If you opt for another term life insurance policy, the payments will more than likely be higher because you’ll be older and deemed to be more of a coverage risk. You will undoubtedly have to undergo a complete physical no matter which type of policy you choose. If you’ve had medical problems in the interim, you may be turned down for coverage or at the least would have to pay significantly more for a policy.

Amount of Coverage

After deciding that a term life insurance policy will provide for your family’s needs, you’ll have a couple more choices to make, namely how long the term should run and how much coverage to take out. It is very important that you determine how much money your family will need to survive without your income for an extended period of time. To help you decide upon the amount of coverage you’ll need, you should factor in such things as mortgage payments and monthly bills, including auto, health, and home insurance payments as well as food, clothing and utility payments for as long as your children will be at home and until your spouse will be able to survive without your income.

Length of Term

Another thing to consider is the term of the policy. If you have young children you will need to make sure they’re provided for until they reach maturity. You may also want to consider a term long enough to ensure they can get a college education, which will mean until they’re 23 or 24 years of age. Fortunately, term life insurance coverage is available for 20 + years. You will need to keep in mind that a term policy will eventually run out, so you should begin making plans for continuing life insurance coverage long before the policy expires.

Shop Around

Once you’ve determined the length of the term and the amount of coverage, it’s time to start shopping for a policy. Don’t just settle for the first thing you’re offered–do a little research and try and find a carrier that will provide you with the coverage you’ve decided you need at a price you can afford. Get some term life insurance quotes from online insurance companies, and compare them with quotes from brick and mortar carriers. Weigh the pros and cons of each offer, and make an informed decision.

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