It's easy to find a term life quote online. In fact, in the next half-hour you could probably find dozens of term life quotes. But then what? Do you simply take the lowest price? That's the best deal, isn't it? Not always. You have to dig a little deeper and know what you're looking for before you can confidently make a selection. Of course price is important, and that's one of the most attractive features of term life insurance to begin with.
Did you realize there are many different types of term life insurance policies, and that not all term insurance is the same. Have you ever of level term, convertible term, or annual renewable term? Even though all three of these insurance policies are in fact term life insurance, they are all three priced differently. So already you can see that getting a term life quote is not as simple as picking the lowest price.
Let's start with annual renewable term. With an ART policy each year the policy renews and the premium is calculated based on the insured's new age. Obviously, at a younger age premiums lower as the mortality rate is much lower. As a person gets older the mortality rate increases and so does the premium. With an ART, it is expected for the premium to increase each year. This could be considered an obstacle to many people. And that's why level term insurance was created. If the policy was issued for 20 years, a level term policy seeks to average the premiums paid from the earliest years to the last years. So at an earlier age, the insured would pay more in premium, and at an later age pay less than an ART. A level term policy is simply a way to have a predictable premium throughout the life of the policy.
Now a convertible term life insurance policy may be annually renewable, or level premium but has a very special feature. It has the ability to be converted from term life insurance to a permanent insurance policy. Having this special feature adds to the premium. In other words the insured pays a little extra for this privilege. In all three of these examples the underlying insurance coverage is a term life insurance policy. However, you can see that depending on how the policy is structured, there can be a variety of premiums. So again, it's not as simple as picking the lowest price.
When trying to choose a term life quote perhaps the most important thing is financial strength. What could be more important than the insurance company's ability to pay the claim? How tragic would it be to pay premiums for years only to have the life insurance company go bankrupt and render your policy worthless? You can quickly check the financial strength of any life insurance company before getting a term life quote by checking with the financial ratings companies.
The three biggest and best-known ratings services are A. M. Best, Moody's and Standard & Poor's. Each of these gives a letter grade reflecting financial strength. A grade of "A" is considered superior. Do not even consider a term life quote from a company graded lower than A.
don't take chances with your financial security.
