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What To Know About US Term Life Insurance Policies

By Marilyn Katz

Republish: EasyPublish™ Published: 24Jun2010 Word count: 522 Viewed: 177 time(s) Get Free Content For Your Site

Do you think you know everything there is to know about term life insurance in the US? Are you sure? Term policies are NOT all the same. There are some important features that you may have overlooked. This can affect the price and value of your policy in the future. Give me 5 minutes, and I'll bet I can tell you something you did not know.

Not all term rates include a level rate guarantee. Company A may cost $35 a month. Company B may charge you $25 a month. Company B sounds a lot better, right? Well, make sure that both insurers have a guaranteed rate for the entire term of the policy. Some are only guaranteed for 5 years. Your policy may last for 20 or 30 years.

Some policies allow you to opt into a return of premium rider. This costs a little extra, but it allows you to get all of your premiums refunded if you survive the term of your policy. This is a great way to get a cash bonus back at the end of the term.

This can be a nice feature. Let us say you pay $50 a month for a twenty year term policy. Multiply that fifty dollars out over 20 years. You have paid $12,000. Wouldn't it be great to get a check back for all of that money at the end of your contract?

Life insurance companies are also not all the same. We compare the top ten insurers for premiums on the same individual. This was for a one hundred thousand dollar policy with a term of twenty years. Guess what?

We found a three hundred dollar difference in premiums between the cheapest and most expensive. By taking the lower cost company, our applicant could save $6,000 in twenty years. That amount of money makes it worth it do do some comparson shopping.

Some policies also add extra options, called riders, that may help you in the future.

You probably want to buy a policy with an option to convert to whole life in the future. That way, at the end of your term, you can choose to extend coverage for your entire life. You do not have to provide any evidence that you are healthy either. So if you shoud develop a health problem in the future, it is very nice to have an option to make sure you can stay covered if you want to.

You can also add disability or critical illness coverage to some policies. In fact, it is more likely that you will have a severe illness or be disabled than that you will actually die during your policy term. Your insurer has underwritten you, and they expect you to survive! You may choose to add these extra riders, at an extra cost, for more protection.

Term policies are not just for younger people. We have seen some companies, these days, that are willing to extend policies up to age 75. Past age 75, you probably need to buy whole life.

Did you learn anything new? We hope you did, and that our tips can help you save money and time when you look for a policy.

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