An online search for term life insurance quotes should be preceded with some in-depth personal evaluation.
Life events will determine how much life insurance is needed throughout various life stages. Early in life, most hard-working people have many large financial obligations that would be impossible to meet following the death of the primary wage earner. As the children grow and the mortgage is repaid, the needed amount of life insurance coverage will decrease. The insurance shopper is wise to make some decisions prior to embarking on the quest to find the best term life insurance quote. Read also: Life Insurance Quotes for Young Adults.
Purpose of the Policy
Term life insurance is an affordable policy that can be purchased for any number of purposes. Multiple purposes can dictate the acquisition of multiple policies from various insurance companies. The insurance shopper should determine if one, or more, of the following purposes applies to the personal situation.
- Business continuity – Owners, partners and principals with significant ownership interest in a business should be covered by appropriate term life insurance. Four out of five businesses will not survive the loss of the owner. Funds from the term life insurance policy will be used for the transition. Read also: Don’t Apply for Life Insurance Quotes for Over 80 Until You Read This.
- Pay off mortgage – Term life insurance policies are an affordable option for the homeowner with an outstanding mortgage balance. The spouse would receive the proceeds and repay the bank. Any extra funds are available for the family.
- College educations – Young children have dreams of attending college. Their dreams can be preserved with adequate insurance planning.
- Sustain family – Following the loss of the primary wage earner, the family will have financial needs. The proceeds from the term life insurance policy can provide peace of mind.
The person who will receive the death benefit payout from the insurance company is called the policy beneficiary. Various people, or entities, can be named to carry out the wishes of the insured. Read also: Life Insurance Protects Your Family.
- Business entity – Life insurance policies for company principals will name the business entity as the policy beneficiary. This approach prevents legal disputes and tax implications for the funds from the policy.
- Spouse – Most term life insurance policies name the spouse as the primary beneficiary. The wishes of the insured are carried out according to a pre-written plan. Trusted financial advice is an important facet of this approach.
- Child – Some people purchase term life insurance policies to create a trust for young children if the insured passes away. Legal requirements can accompany the designation of a minor as the policy beneficiary.
- Other – Almost anyone can be named as the policy beneficiary. Insurance companies allow the insured to change the beneficiaries at any time through written requests.
Large Death Benefit or Multiple Policies
Each term life insurance quote will vary widely from the others offered through the website. Insurance companies assign annual premiums based on the perceived risk of death, which is determined by the mortality tables. Actual death rates are tracked for each age group. Other factors play significant roles in the cost of term life insurance. Read also: The Best Life Protection.
- Spread risk – Throughout the years when insurance needs are highest, the policyholder can reduce annual premiums by purchasing smaller policies from different insurance companies. A million-dollar policy presents a significant risk to one insurer. Five separate $200,000 policies with different insurance companies are less expensive for the policyholder.
- Reduce premiums – Smaller policies offer affordable annual insurance premiums. Each policy quote will provide the estimated annual premium. The rates can change if the insurance company requires medical exams prior to the underwriting process. Smaller policies might not require medical approval.
- Adjust coverage – Multiple policies with different terms allow the insured to add and drop coverage as the years pass. A young family might have a $300,000 policy, a $200,000 policy and a $100,000 with 20, 30, and 40-year terms, respectively. The first policy covers the young family. The second policy would cover the home mortgage. The third policy would be for the retirement years. Read also: Life Insurance Rates for Seniors.
Multiple term life insurance quotes are presented to allow the online shopper to compare each company offer with others. Each policy must be evaluated for the cost of insurance for each $100,000 of death benefit. The insurance shopper can adjust the size of the policy to find the best annual premiums. A sound life insurance strategy will provide peace of mind for the entire family.