The Best Term Life Insurance: Qualities And Characteristics

What’s the best term life insurance? It’s the type that best meets your need and the needs of your family.

In order to determine which qualities and characteristics are best for your situation, you can review what is available and determine what is most important to you.

Death Benefits

With term life insurance, many people assume that the death benefit stays the same throughout the “term” of the insurance. However, if may or may not remain level, depending on the type.

There are decreasing policies that start higher and have a lower death benefit as you get older. Choose these policies if you will be sending children out of the house over the term of the policy or will pay off significant amounts of debt (such as for a home or a business) during the term of the insurance.

Increasing policies are clearly the opposite. You may consider these policies if your obligations as a provider will increase over the term of the insurance. Will you be adding children? Assuming a home mortgage? Taking on education debt for yourself or your children? In these cases, an increasing policy may be the right choice.

Level term policies are the standard. With these policies, the death benefit and the premium stay the same over the entire term of the policy.

Preferred, Preferred Plus, Standard Rates

When you first hear the terms and rates for the best term life insurance, the prices advertised are extremely low, generally speaking. The rates quoted in these ads are generally the preferred plus rates – for the customers in the best health.

To get these rates, you must be in excellent health, not smoke or use tobacco, have no history of substance or alcohol abuse, be within the average weight category (not obese), have average (not high) blood pressure and cholesterol levels.

Preferred rates and standard rates are the higher rates for those with higher health risks.

The majority of people who get life insurance do not qualify for preferred plus rates, so when you compare rates, make sure you’re comparing the actual rate for which you qualify.

Premiums

Be sure the policy you are purchasing has guaranteed premiums for the life of the policy. While you may simply expect that this is the case, if it is not specifically noted in the policy, then you are open to premium increases with no notice.

Renewable and Convertible Policies

A renewable policy is one that can automatically be renewed at the end of the term without an additional medical exam.

This can be an important characteristic, especially if you have a history of medical problems in the family or have gained weight over the course of the term. However, for someone in good health, the premiums on a renewable policy can be higher than you would pay elsewhere.

It’s a good idea to have the option available, but not always a good idea to exercise the option.

Convertible policies can be converted from term to another type of life insurance before the end of the policy or anytime before the end of the policy.

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