When comparing quotes on term life insurance, it is important to understand what it is exactly. This form of life insurance pays only if the insured person dies within the covered period. When you purchase this form of policy, you get it for a specific period ranging from 1 to 30 years. Most people select a policy for 20 years on average. Once you sign up, you will get the same premium payment for the entire length of the policy. This is the level premium form of life insurance. This form of life insurance policy differs from the permanent policy version.
Term life insurance differs greatly from permanent life insurance policies. Before comparing quotes, it is important to understand the difference. Permanent policies offer the insured coverage through their entire lifetime. As the policyholder makes payments, part of that goes towards the cash value of the policy. That cash value allows policyholders to have access to the value for different reasons, even if the insured doesn’t die. Many use it as a way to save for a house down payment or for college tuition. If the insured dies, the policy pays out the amount of the cash value or the death benefit.
Many people prefer term life insurance to permanent. Term life usually comes with significantly lower payments than a whole life policy. That means the policyholder can get more coverage for less money. The amount of insurance does not depend on the amount of payments made. So if someone dies a year from the start of the term policy, the full amount of the policy pays out, not just a small fraction. Most term policies have a short startup period when compared to permanent insurance. Before comparing quotes, it is important to know what you get.
What else do you need to know about term life insurance? Your rates will vary depending on many factors. If you smoke or use other tobacco products, the insurance company will require higher premiums. Age and medical condition also plays a significant role. The older you are or the poorer health you are in will indicate higher premium levels. Height and weight proportions have an effect as well. If you are significantly overweight, you will pay a higher premium amount. You need to know about all of these factors before you can start comparing quotes. Make sure all quotes consider these factors. That will ensure you are comparing apples to apples instead of to oranges.