Affordability

Cheap Term Life Insurance Options and Plans

Term insurance is often referred to as the “cheap” life insurance program, since it is usually offers the most affordable premiums compared to the different life insurance policies on the market.

Cheap doesn’t always mean low quality or value, however, especially if you have an experienced insurance agent to help you find the quality insurance policies you need at an affordable price.

The reason basic term life insurance policies offer lower premiums is that they give insurance companies and their actuaries more stability and leave them better able to measure the true probable risk involved. Term life insurance policies also won’t leave them on the hook for long periods of uncertainties and additional health risks. Because term life insurance have a fixed term, insurance companies are better able to gauge what risks they’re taking on by insuring you.

Here are some common types and features of popular term life insurance policies:

Decreasing term insurance. The decreasing term insurance policy also provides coverage for a specified period of time. It is one of the cheapest options available because the face value also decreases over a specified period of time — while the insurance premiums remain the same.

Level term insurance. One of the most common forms of the term insurance policy is the “level term” insurance. With level term insurance, the face value and premium will remain the same during the entire initial period of the term policy.

Renewable option. Most term insurance offer a renewable policy. However, the renewals often come with an important catch: the premiums and coverage amounts can and do often change. The renewal policy can state that the term insurance plan is renewable up to “70 years in age”; but you can expect increases in premium rates, especially as you get older and the chance of payout increases.

Continued payment. Once the policy holder stops paying the premium, the term life insurance policy will be terminated.

Conversion option. Many term life insurance policies can be converted to another term (or even whole life) insurance product that the company offers. The conversion can be renewable annually if the company offers term. Read your conversion option thoroughly before you exercise it. The collected premium may or may not be converted and adjusted based on the age during that time.

Term life is not perfect for all, but it is suitable to people who need short- and mid-term life insurance coverage at an affordable price. Term life insurance plans are useful tools for providing protection against the potential loss of an important income earner or key person in a business. Many businesses astutely take out life insurance on their key personnel to ensure that the business will have some support and ability to survive if that key person ever dies. Similarly, working parents often rely on term life insurance to provide for their children’s education, home and living expenses, should one or both of them die.

Life insurance can be a complicated and stressful decision. The good news is that you’re not alone. At Critical Illness Policies, we can help you explore your best options and tailor a plan to meet your needs. Call us now at 561-210-5822 and speak to our experienced and helpful agents to get the answers you deserve.