A whole or universal life may provide different types of living benefits along with covering many of your financial requirements such as income replacement, debt coverage, estate liquidity, final expense etc; but if you compare the insurance benefits offered with the policy prices, the term life will stand first. There is no doubt that of all the life insurance term life is the cheapest and yet the best. It is true that such a policy has two distinct disadvantages, but if you look deeper, you will find them to be the reason behind their cheaper rate.
Let us start discussing the disadvantages first. While most other policies are valid for the life of the insured, the term life policies can be bought at the most for thirty years. It looks like a disadvantage. But, if you think deeply, you will realize that this is not a disadvantage. Nobody sensible needs the coverage for life; you need the coverage only as long as:
• you have an income to replace
• your mortgages and loans are not fully paid back
• your children still need your support
• you have not made enough bank balance to take care of emergencies
In fact, if all the above conditions are met, you can buy the policy for lesser duration as well. If you look at the quote form, you will find that most policies are sold for 10/15/20/25/30 years. You can choose the duration of the coverage as per your requirement and pay. The purchase procedure always starts with requesting for term life insurance quotes and before you do that, you will have to decide on things like these.
Indeed, term life insurance quotes depend on various factors and if you want it cheap, you will have to take care of them all. However, let us go back to what we were talking about; i.e. about the apparent disadvantages of a term life. There are two – that they have limited validity and do not offer any living benefit. We have already seen that the first one does not really matter; now let us examine the other.
A true life insurance policy pays benefit to the beneficiary on the death of the insured. This is called the death benefit. However, the cash value policies also pay benefit to the policyholder while he is still alive; these are known as living benefits. These living benefits include loans, withdrawals, collateral assignments, split dollar agreements, pension funding, and tax planning etc. However, the prices of these policies are always high in order to provide such facilities. The fact of the matter is, the policies which provide the living benefits can do so only because you pay for it. On the other hand if you buy cheap term life insurance for insurance purpose and invest separately for capital building, you may gain more.
However, if you are looking for truly cheap term life insurance quotes, you will have to take a few important steps. First, decide on the optimum coverage term and coverage amount. If they are high, the rates too will be high because they generally increase the risk for the insurer. However, if they are too low, the whole purpose will be lost. Ideally, the coverage amount should be large enough to replace the income you bring in every month. If you are not sure how much that will be, multiply your annual income before tax with fifteen to come up with an approximate amount.
Buying the policy early in life while you are still young and healthy is also essential for receiving cheap term life insurance quotes. Using tobacco in any form, being overweight and living a carefree life will also increase the quotes. The carriers always make you go through medical test to be aware of your exact health condition as well as to see if there is any potential for any diseases in the near future. There are also no medical term life insurance, which provide instant and hassle free coverage; but they are little more expensive.
One more point is: these no medical term life policies do not guarantee coverage. You have to produce different agency reports as well as Medical Information Bank; you get the coverage only if you qualify. The coverage under such a policy is also denied if you have been denied coverage twice before. However, the main benefit of these policies is: their underwriting period is very short. Therefore, if you qualify and are ready to pay at the higher rate all through the duration, you can receive the coverage within twenty-four hours of applying.
Article by David Livingston of EQuote, who is a specialist in everything life insurance. For more information on term insurance and instant life insurance, visit his site today.
