Term life insurance is one of the more popular forms of life insurance available. What exactly is term life insurance?
- Term life insurance provides a specific death benefit for a predetermined period of time. Typically, the policy will be written for 5, 10, 20 or 30 years.
- There are variable premiums on a term life insurance. Your premiums will adjust over time, as the risk increases for the insurance carrier. Most policies have a premium cap written in, indicating the highest the premium that can be charged. This premium cap will be identified at the time the policy is taken out. The variable premium allows you to have a very affordable policy in the beginning of the policy period, with the higher costs coming later in the term of the policy.
- It may also be renewable. Most companies will allow you to renew the policy after the initial term has expired. This can vary from state to state and company to company, so be sure to check on the renewability of the policy prior to signing up for the policy.
If, after reviewing the information provided on term life insurance, it sounds like it will fit your needs, you will need to get a quote. In getting a quote, you will be asked for several pieces of information, including:
- State of residence.
- Date of birth.
- Whether you used tobacco in the past 12 months (some companies will allow you to revisit the premium if you have quit smoking for a period of 12 or 24 months).
- Coverage amount desired.
- Length of insurance desired.
- Name and contact information.
You may be asked to take a physical prior to binding of coverage. While this is not required by all policies, most policies will offer a lower premium with the physical if you are shown to be in excellent health.
The question that commonly causes the most anxiety is the coverage amount desired. The easiest way to determine how much coverage you need is to multiply your projected annual income by the number of years until retirement. While this is not a perfect model, as incomes and expenses change, it will give you an idea of the ideal coverage amount. Now that you have prepared yourself to get a quote, you need to contact an insurance company that writes life insurance. There are three common ways to do so.
- Through the internet. This is quickly becoming the easiest and most popular way to get a quote for life insurance. There are a number of sites that offer free term life insurance quotes, including highly rated insurance companies like State Farm. Perform an online search for "free term life insurance quote" though any common search engine, such as Google, and you will find a large number of sites that will offer free quotes.
- In person. If you prefer to discuss your quote in person, you certainly aren't alone. Visit your local insurance agent and ask for a life insurance quote. Agents act as an intermediary between yourself and the insurance company. The agent will take your quote information and send it in to get an exact quote from the insurance carrier.
- Over the phone. Most insurance carriers will also take your life insurance application over the phone. Contact the carrier of choice and ask for a quote.
You should never be charged a fee for a term life insurance quote. All insurance carriers and most websites offer the quotes for free. Once you have received your quote, make certain it fits your needs and you get your questions answered prior to signing the final contact.