subject: What To Know About US Term Life Insurance Policies [print this page] What To Know About US Term Life Insurance Policies
Term life insurance is fairly simple. But sometimes the few extra features you may not have understood can be the difference between getting a good policy or getting one you are not that happy with. Take some time to learn about features of your next policy that can make it better for you.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. For a small added premium, you get your money back when you survive the term. Why not get some money back at the end.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. Who wouldn't want to get some money back for the end?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. If you should happen to suffer from a severe illness at some point, you can still be sure you can stay insured.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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