Buying Term Insurance- Saving Money

Term Life Insurance

Term Life insurance is a great way to buy larger amounts of coverage needed or to make having life insurance affordable. It costs less than permanent insurance and can be combined to give permanent policies a boost or as stand-alone coverage.

1yr, 5yr, 10yr, and 20yr are standard time lengths of Term Life Insurance. Annual costs the least, but increases every year. (You are receiving a new policy every year based on age.)

Here's a few tips on using Term Life Insurance.

Term Life can be used to preserve insurability. If your family has a genetic history of a major health condition, choose Term with a convertible to permanent provision as soon as possible. Why? Insurability is not reviewed when using a convertible provision with companies that offer the provision. If you are aware that you may have cancer, diabetes, or heart trouble by age 50, use the lower cost Term policy now if permanent life is not affordable. You will be able to convert the face value once you can afford permanent. By age 50, you may be medically uninsurable.

Term should not be used to cover babies and children. The premium cost for a child is worth the extra few cents for permanent insurance and many companies will not issue term on children.

A new purchase- Home Mortgages- There are term policies that have a decreasing term periods for 15 and 30 years. The premium never changes, but the face value decreases as the balance of the loan decreases. Once the home is paid, this coverage will not be needed. Its a good way to save on costs.

Marriage/ Starting a Family- With so many relying on you, it would make more sense to have a larger term policy should the same amount in  whole-life is not within budget. Permanent life insurance will last until you die from old age, but Term would provide just the same if you died tomorrow. Although the Term coverage will eventually expire, during family years of life, there is more responsibility that you may not have when older.

Business Venture- Whether a sole-proprietor or operating with a partner, Term is a great way to obtain extra coverage assigned only for business purpose. Once the business is well off in operation, funds can be set aside for a loss. Until then, use a Term policy for the earlier years, and opt for a permanent policy or profit returns in later years.

Term premiums cost about the same when shopping around- give or take a few dollars. Do not believe online ads promoting $250,000 in life insurance for $9. If it sounds too good to be true, then it probably is. Although Term costs less than permanent life insurance, use your best judgment as to how much is too less and avoid signing up a "death by travel" type policy full of exclusions. Legitimate Life Insurance is purchased offline, you can only receive quotes. Property and Health Insurance can be purchased online.

If you are an active person, commuting, etc., an accident based life policy can provide a significant increase to your coverage as well.

When planning your Term Life Insurance be sure to ask questions:

How many years until my term insurance expires?
Will I be able to renew without proof of insurability/ medical exam?
How much should I expect to pay in order to renew my policy?
Can my Term policy be converted to permanent insurance without a medical review?
If I miss premium payments, will I have to start over or can I pay the past due balance?
If I decide to renew at the end of 20 years, will my premium payments increase every year thereafter?
Is there a premium waiver provision should I become disabled to keep my policy in force before expiration?
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