One financial product that is significantly cheaper than things like gas and food these days is term life insurance. It is estimated that term life premiums have fallen 30% or more in the past 10 years. Can you imagine buying gas at the same price you paid 5 years ago? It doesn’t get any better than that.
Why Is Term Life Insurance Cheaper?
As people are living longer term life insurance companies will have fewer claims in any given period. Add in competition and you will see why you can get a great price for your term life insurance protection. Term life covers you for a specific period, normally 10 or 20 years, is simple to uinderstand and it is easy to compare the price of one company to another.
But Do You Need Term Life?
Children don’t need life insurance, but parents with young children need a lot of term life insurance as the cost of bringing up and educating children mount every year. For 90% of people, term life is what they should buy. Term is simple and cheap and it provides coverage for a lot of personal needs that will fade away over time. Term life does not have lots of bells and whistles which is why it is cheap. If you die, your beneficiaries get the money.
How Much Term Life Insurance Do You Need?
Some brokers suggest 7 times annual earnings; others say 10 times. The best way is to look at your own family situation. Who do you want to protect in case you pass away early? Many people need term life insurance to cover the mortgage, college bills and other family needs. Then, how much annual income will your family need on a day to day basis?
What Sort Of Term Life Is Recommended?
Mostly recommended is level term life insurance where the premium remains constant. Most life insurance companies sell this level term life insurance and increase the premiums after the first 10 or 20 years has expired.
Term policies can run 10 or 20 years or to age 100, with the 10 and 20 year term being the most popular. If it turns out you don’t need the policy for that length of time, you can drop some or all of it.
Finding a good online broker to do the shopping for you is more than half the battle in getting the best deal for your term life insurance coverage.