When you need basic insurance coverage but cannot afford the monthly premiums from whole life plans, check out low cost term life insurance policies. The cost of these cheap term life insurance are usually one fifth compared to whole life policies with similar sum assured, and that is because they do not incorporate a savings element. This means that at the maturity of these low cost life insurance, policy holders do not earn a cash value on their term life plans. Low cost term life policies only pay out a death benefit.

Low cost life insurance with no savings are generally better options for young adults that have limited earnings but require insurance protection for their dependents. These people have a lot of expenses going in life, such as saving for a wedding, saving for their first car, apartment and repaying student loans etc. There is usually not much of their paycheck left by the end of the month. It is no wonder that trying to sell them an endowment or whole life policy is pretty futile. However, it is most important that their insurance agents persuade them to take up some discount life insurance early in life.

For example, a 25 years male can get a 10 years term life insurance policy with $500,000 sum assured for only around $180 per annum, which is less than 50 cents per day. Comparatively, a fresh college graduate's expected annual income is $40,000 for the next 5 years. That $500,000 insurance money is meant to replace your income for your dependents over the next 10 years in the event that you are not around. That is why cheap life insurance makes pretty good sense for fresh graduates and working adults who cannot afford extra money to service a whole life plan at the moment.

Generally, the cost of term life insurance policy increases by around 25% for every 5 years of additional policy coverage and the longest term assurance usually max out at 30 years. It is not recommended to take out such as long term policy with no endowment rider. Indeed, it is preferred that after a two to three years of working life, you start putting money aside for an endowment or whole life insurance policy to prepare for your retirement planning as well as protect your family from any loss of income.

Otherwise, by the time you hit 40 years of age you will find that the starting term life insurance rates are nearly double of what you need to pay at 25 years old. The preferred route is get covered with a low cost life insurance with no savings followed by a whole life within the next few years before the initial policy matures.

Life Insurance Comparison

Regardless of the type of low cost life insurance plans you decide to go with, there are some options that can help you get the cheapest life insurance rates. For example, if you work in high risk professions such as offshore rigs, divers, pilots, air stewardess etc or you participate in high risk activities such as car racing or skiing etc, it will more difficult to get cheaper term life insurance rates.

If you have been smoking for the past three years, are overweight, have pre-existing health conditions or family medical history, you may also be subjected to a physical health examination prior to being offered any discount life insurance plans. Finally as mentioned above, the life insurance rates increase progressively as you age.

For some life insurance companies, they do offer a renewable/convertible low cost term life insurance to simplify the above transition in personal coverage. For example, you can apply for an inexpensive 5 year term life policy which can be converted into a whole life with cash-value policy after 5 years.

One advantage of such convertible term life insurance is that your eventual premium payment will be lesser compared to taking two separated policies and more importantly, you do not need to re-declare your health status when renewing that whole life policy. As you know, we cannot foresee what can happen to our bodies in the future and if something happens to you near the end of your term life plan, you will not be able to get any insurer to provide you with a new life insurance.

Do note that you need to pay a slightly higher monthly premium for convertible term life insurance because of the way your future whole life with cash value plan is being computed.

Although discount life insurance such as term policies do not accumulate cash value or offer tax benefits compared to whole life plans, some people feel that they still work out to be better than whole life policies.

Although some argue that term life plans run out at 65 and do not provide any living benefits then, advocates feel that by that age, you do not have any dependents that are relying on your income. You will probably be looking at estate planning to leave behind funds to help your beneficiaries get ahead in life.

For that case, you may as well buy low cost life insurance and use the money saved over the cheaper premiums for your own investments at higher rates of returns.

As life has many different unexpected tribulations for us, it is your responsibility to take care of what happens when you are no longer available to support your family. While your presence cannot be replaced, at least your beneficiaries will be financially taken care of by making preparations ahead when you buy life insurance.