There is no doubt that insuring oneself against death is one of the
biggest concerns that people have. The reason is simply that, for many
people, it is a way to ensure some financial security for loved ones.
Amongst the most popular options is term life insurance, quotes for
which are considered the most cost-effective available.
There are
many different types of insurance policies to choose from, but the
structure of term policies ensure low cost insurance premiums that can
fit practically any budget. Also, the temporary nature of these policies
means the insured party is never tied down to a 30-year contract with
the insurance company, as is the case with alternative policies.
But
as with all financial contracts, there are aspects to this kind of life
insurance that should be considered before deciding if it really suits
your lifestyle and coverage requirements.
Term Life Insurance Explained
With
so many insurance policies to choose from, there can be some confusion
over just how low-cost term life insurance quotes are compared to the
alternative. In fact, this is the original kind of life insurance policy
and is, therefore, quite straightforward.
For a start, payments
are made at a fixed rate over what is known as the relevant period of
time. What this means is that for an agreed period, the policy will
cover the payer, but once that period ends, the coverage ends. And
because the risk of a payout within that period is less than with a
universal life policy, a low cost insurance premium is charged.
The
life insurance term can range from a single year to 10 years to 20
years, and if the insured party dies within that period, the
beneficiaries receive payment. At the end of the term, the insured party
can opt to extend the coverage. So, the policyholder effectively has
maximum control.
Keeping Costs Low
When
seeking term life insurance quotes, there is a variety of questions that
must be answered that directly affect the premium that the insurance
company will set. For the most part, they relate to health and
lifestyle, since these are aspects that can directly influence the life
expectancy of a person.
For example, smokers and heavy drinkers
are considered bigger risks by an insurance company, so the premium is
going to be higher for these people. But low cost insurance premiums are
available to sports enthusiasts, non-smokers, tea-drinkers, and those
who have an active lifestyle.
Other aspects that will affect the
size of the premium charged on the life insurance is age, occupation,
medical history and even place of residence. Older applicants will be
seen as more likely to pass away within the period, while those who have
hazardous occupations or who have recently undergone major surgery
(like heart surgery), are also seen as high risk.