For many reasons, you can consider buying an insurance cover to cater for a limited period, for comparatively lower premiums. In case you are anticipating significant changes over your lifetime, you do not have to buy a policy that covers your entire life. However, the term policy does not provide for an investment component or savings and does not accumulate cash value. When you decide to buy a term policy, it is important to shop around and ask the right questions to get the best term life insurance rates. The following are some of the factors to consider when choosing a term policy, including:
· Stability of the company
It is very important to find out whether an insurance carrier is stable before choosing a policy. The purpose of buying insurance is to ensure your loved ones are well taken care of in the event of your premature death. Therefore, it is important to find a service provider who will be present longer than you are and able to meet its obligation in the long-term. In addition to having an excellent financial health, the provider should have a good rating.
· Convertibility of the policy
Your insurance needs do not always vanish when the term ends. Therefore, it is important to know the options at your disposal for renewing or converting your policy to a permanent policy, without necessary going through the rigor of applying for insurance, including undergoing a medical exam. It is also important to read the fine print to determine the time limitations imposed to facilitate a conversion option. Some policies may offer you the option of converting before the age of 65 or 70 or the option to convert within the first 15 to 20 years.
· Advertised rate
Many insurance shoppers choose the term policies because they are cheaper. Generally, the term life insurance rates advertised by service providers are based on applicants who have an exceptional health. In order to attract shoppers, the lowest price is normally quoted. Therefore, if you are relatively healthy or have a pre-existing medical condition for your age, the rates are likely to change. Therefore, to benefit from the lowest potential rates it is important to work on your health and improve your lifestyle.
· Income being replaced
It is important to determine the income needs of your dependents over the course of the policy. To do this, you need to consider the ongoing expenses on shopping, rent, tuition or mortgage. Also, factor in long-term goals like college education, medical bills and funeral costs. This will give you an idea how much income will need to be replaced to cater for the needs of the family, when you are no more. Therefore, if you have 20 years to go before retiring you can consider a 20-year term policy.
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