MyLifeQuotes Blog

Term Life Insurance Quotes: What You Need to Know

It’s never a pleasant thought, but responsible people need to plan for their deaths as well as for their lives. But if you have a family or have people who depend on you, it just makes sense to provide for them once you’re gone. How else would they be able to carry on and maintain their current standard of living? Since it’s known that just one in three people in the UK doesn’t have life cover, there are plenty of opportunities to leave your survivors without adequate funds. One of the best ways to prevent this onerous situation is with affordable term life insurance. To get an idea of the sort of cover you need, it’s wise to obtain several term life insurance quotes. In this article, we’ll offer some valuable information about this type of life insurance to help you get started.

Term Life Insurance Quotes: What is Term Cover?

Life insurance, as most of us know, is cover that pays out upon the insured person’s death.  There are several basic types of life insurance to consider, and each has its good and bad points. Another aspect to look at is the cost of the premiums you’ll pay to keep the cover in force. Before obtaining term life insurance quotes, be sure you understand exactly how it works. A piece of good news is that this type of cover usually is the most affordable. Term insurance provides protection for a set number of years, or term. If you die during the term, the policy pays out to your survivors. The term can be just about any length, from decades to just a few years. It’s important to know, though, that the older you are the harder it might be to obtain term cover. So, if you opt for a 10-year term, for example, and die in year 11, your beneficiaries receive nothing. There is an interesting aspect of term cover that centres on terminal illness: If you are diagnosed with a fatal disease during the term, some cover will pay out a lump sum. However, this amount usually is lower than the total sum insured.

Term Life Insurance Quotes: A Few Relevant Details

Although we can’t speak to a specific term policy, we can discuss term cover generally. For example, one of the things you’ll have to do, regardless of the provider, is to decide how long the term will be. Factors to consider are whether you have children or other dependents, and whether you have significant financial obligations, such as a mortgage. In the case of children, many parents opt to carry term insurance until their children are finished with their education, at about the age of 18 or so. If you have children in university, the term should be extended until they graduate. People who don’t have children very often set the term equal to the length of their mortgage, or until their spouse reaches retirement age.

Term Life Insurance Quotes: Determining the Amount of Cover Needed

Most policies have minimum and maximum limits on the amount that’s paid out. However, insurers generally are quite flexible on these amounts. When thinking about the amount of cover you’ll need, be sure to provide enough for your family to settle your debts and maintain their standard of living. The amount you need is highly dependent on your particular circumstances. For example, a person with children who has a large mortgage generally will need more cover than those with no children and no mortgage. A good rule of thumb to determine the amount of cover you’ll need is to set it equal to ten times your annual income. Do bear in mind, though, that the more cover you buy, the higher your premium will be. Another thing to consider is the sort of cover, if any, that’s provided by your employer. This insurance usually pays out a lump sum equal to several times your annual salary if you die whilst employed. So, it’s wise to enquire about the details of any cover your employer provides. Finally, it’s essential to review your insurance cover from time to time, such as when there are major events in your life, such as the birth of a child or when you retire.

Term Life Insurance Quotes: About Costs

Term life insurance providers base the amount of your premium on the length of the term and the size of the payout. In addition, they may consider your age, occupation, general state of health, and gender. It’s widely known that men usually don’t live as long as women, so their premiums can be as much as 30% higher. There are new regulations coming into force in December 2012 that prevent insurers from setting premiums based on gender. This means that women’s premiums could rise up to 20%, whilst men’s premiums may drop by about 5%. Another aspect that influences the cost of life insurance is the insured’s state of health and/or medical history. Premiums are higher for older people, as well. If you work in a risky occupation, your insurance will cost more. One factor that can have a huge impact on how much term life cover will cost is whether or not you smoke. Smokers almost always pay a higher price for term cover. Even if you give up smoking, most insurers won’t lower your premium until you’ve been smoke free for one year. It never pays to be dishonest about your health when obtaining quotes for term insurance. If you fail to disclose relevant facts about your health, the policy is likely not to pay out when you die. Try to choose cover with guaranteed rather than reviewable premiums. Reviewable premiums offer level premiums for fewer years than the term of the policy, which means they’re likely to increase. Guaranteed premiums stay in effect for the entire term, and don’t increase. Reviewable term cover becomes progressively more expensive the older you are.

Obtaining term life insurance quotes is the best way to find affordable cover.

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