Best Term Life Insurance Rates (Really!)
Beware of The Best Term Life Insurance Rates!
Beware The Best Term Life Insurance Rates!
That may sound like a severe warning, to ask people to be careful of the best quote they got for a term life insurance policy. But policies and pricing schemes different. What looks like the best rate today may not look so good in 5 years. And yes, we have said before that insurers are different, and you can save money by comparing rates. But just be sure you are – as they say – comparing apples to apples.
Note: Take Advantage of Our Life Insurance Rate Quotes
Does The Term Policy Have a Conversion Option?
Some cheaper term policies do not have an option to convert, before the policy expires, to a permanent policy without having to resubmit to health underwriting. That cheap 10 year or 30 year term policy may be great now, but it is also prudent to keep your options open the future.
Many peope don’t even consider the value of an option to covert later. If you are healthy today, that’s great. But it is hard to know what will happen in a few decades, and it is nice to know you have left the door open to buy permanent coverage at standard rates, even if you do happen to get sick or old (as we all must).
Sure, rates for whole life will be higher, per amount of coverage. Most people solve this by settling for a much smaller death benefit to cover retirement needs. They an also use the permanent coverage in a senior life settlement, and actually sell that permanent policy for a percentage of the death benefit while they are still alive.
Are The Best Term Rates Guaranteed To Be Level Through The Whole Term?
Most of the time, the rates you are quoted in year one of your policy, will also be the rates you get in year 20. But sometimes, we have seen cheaper quotes because the quote was only guaranteed for 5 years! That means the price could go up in year 6, go up again in year 11, etc. Over the whole term of the contract, the policy owner would actually pay more.
Are You Really Qualified for That Super-Preferred Rate?
We have seen a lot of ads for cheap term life insurance that promoted the very best rate that only 6 people in the whole state would every qualify for. Once people applied, the actual price came back quite a bit higher, and those applicants were unhappy. But those best rates could be reserved for people who had no bad health habits, no family history of disease, great credit, and the perfect height and weight. Can you control all of this? We do not think that most people can.
The Term Period Matters Too
Even if you are comparing identical products, you must know that the best 10 year term rates will be lower than the best 20 or 30 year terms. The longer the insurer takes a risk, they more they will charge for that risk. The ten year term policy will be cheaper because the insurer only has to guarantee the price and coverage for one decade, and not for 2 or 3 decades.
Other Term Life Riders
Some policies may also come with other valuable features that make them more expensive, but more useful. Return of premium, waiver of premium, disability, or critical illness riders can add more coverage, but raise the premiums. If you do not want to pay for these options, that is your choice.
We just want you to be sure you understand what you are paying for!
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