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Low Cost Term Life Insurance Guide

Updated on June 13, 2013

You’ve probably heard a lot about low cost term life insurance lately. But chances are, especially if you are young, you haven’t gotten any or even considered it. This article is created to give you an idea of what term life insurance is about, why you should consider it, and how you can get it at a low cost to you.

What is Term Life?

Term life insurance is when you are buying life insurance for a pre-determined amount of time. Some companies do as little as 5 years, and they usually go up to 30. You pay a fixed amount of money either monthly, semi-annually, or annually for this coverage until the term is up. If you die within the term, your beneficiaries will be paid out the pre-determined amount for your term life insurance. However, if you don’t die within this amount of time, you do not get reimbursed for this money. Rather, you can renew your policy, but usually at a higher premium.

Why Would I Want This Versus Whole Life?

Whole Life, among other things, is encouraging you to put your money away for a set premium plus cash deposits for the duration of your life for until you reach 100 years.  First of all, if you live to be 101, it will all be for naught.  Secondly, as Suze Orman says, the amount you put into Whole Life is overall not worth the amount your beneficiaries get paid back. 

So when it comes to Term Life, you might be getting the insurance because you are concerned about your children, and how they will be monetarily cared for if you suddenly pass away.  Say your child has just turned 10.  That is about 15 years before she is monetarily able to provide for herself.  If you calculate the insurance coverage for how much she will need monthly to cover the income you are no longer bringing in, you at least don’t have to worry that your child is in financial ruin.  If you have no dependents, then you might want to consider how much a funeral costs, how much debt you have, possible mortgage on your house, and so on that other people might have to take care of.  A funeral can cost $10,000, give or take a few thousand.

Even if you survive those horrible “what if” times when it comes to your kids, you may find at the end of your term, you’re priorities have changed, and choose to get a Term Life plan that covers for different variables – say, you’re aging mother or your brand new business.  Maybe you want to add a plan that will pay your mortgage.

Getting Low Cost Term Life Insurance

To get cheap term life insurance , you are first going to have to do research, research, research. Remember, it’s not just about the premium you pay, but how it pays out if you die, and what the plan covers. Everyone is different and require life insurance for different reasons. Ways to find a life insurance salesman would be through the phonebook, your state department of insurance office (which will provide you with a list of agents), word of mouth, or an online low cost term life insurance quote. Yes, those annoying online term life insurance quotes that ask you every last bit of information before they give you a quote, then send insurance salesmen knocking down your door. But don’t fret, the hassle will be worth it. And they’ll back down if you’re stern with them.

Now remember that the longer the duration, the higher the cost will be. Plus, there are some concerns that will pretty much assure that you won’t get low cost term life insurance rates in this life time. If you’re a smoker, if you have a dangerous job, or are into dangerous sports, you may never see a low premium. So if you’re a pack-a-day smoker who is also a poisonous snake wrangler, who motorcycle jumps off the Grand Canyon, you might want to consider quitting smoking, handling obnoxious kittens, and riding a bicycle to work instead.  You may want to look at a different article for information on how to get high risk life insurance.

Resources

On Suze Orman’s Site, you can find a list of State Insurance Departments and Insurance Quote Services in the Resource Center. You can also use AMBest.com to help you find some ratings on insurance companies. And if you can't seem to find low cost term life insurance, you can look here on how to make some extra money so you can pay for some more life insurance.  Good luck on your insurance ventures.

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