Understanding your Term Life insurance Quote

Purchasing term life insurance may end up being the smartest thing you ever do. You will be providing financial support for your loved ones, after you die. Since term life insurance is a legally binding contract, understanding it is very important.

One of the first things you receive upon inquiring about term life insurance is a quote. An article released by lifeinsurance100.com, entitled, “Making Sense of Your Term Life Insurance Quote,” explains what the most important aspects are to focus on when trying to understand your term life insurance quote.

“Term life insurance typically is the most uncomplicated of the various insurance packages. Term life insurance remains in effect for the entire term that was selected by the insured.”

“Term periods generally range between 1 year and 30 years. If the insured dies within the term that was purchased, the individual or individuals that are named as beneficiaries on the policy receive the death benefit amount that also was chosen at the time the policy was purchased.”

Basically, if you purchase a 20-year term life insurance policy and you die within the 20 years, your beneficiaries will be awarded the full predetermined amount, assuming you did not violate any death clauses, such as suicide.

“If the 20-year term passes and you do not die, your term life insurance policy simply would expire. If your term life insurance quote included a renewal clause which you had written into your actual policy, at the end of the term you would be able to renew the policy.”

You probably will not have to take another medical exam to renew your policy, but you would most likely have to pay a much higher premium because you would now be 20 years older and your health would probably have declined.

Now you know the basics, but how do you compare different quotes? You should make sure that you are comparing quotes that have similar qualities.

“Specifically, some quotes will include at no extra charge additional benefits such as accelerated death, accidental death or a disability waiver of premiums. Other quotes may either omit these benefits or make them available as a rider for which you'll pay an additional cost.”

Some life insurance quotes will offer a permanent policy conversion, which you could take action on after the first five years of coverage. Again, there may or may not be another medical examination.

Life insurance, like all insurances, is a very competitive business. Some companies may offer lower rates or better coverage to attract your business. Since it is a legally binding contract, you are responsible for what you sign. Make sure you read and understand everything in your policy before signing.

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