As you approach your twilight years, planning for the end of your life becomes more important. Life insurance is an integral part of growing older. Knowing that your loved ones will be cared for after your death can provide valuable peace of mind. If you don’t already have a life insurance policy, now is the perfect time to start shopping for a policy that will suit your needs.
Life insurance may seem daunting, but term life insurance policies are actually quite simple. When you purchase a term policy, you enter an agreement with the insurance company: If you die during the term, your beneficiaries receive the full amount of the policy. If you survive past the term, your policy expires and all premiums you paid are unrecoverable. Term life insurance policies have no cash value and contain no further investments or benefits.
Although all term life insurance policies follow this basic format, there are several differences between policies:
– Length. Common terms are 10, 20 and 30 years, but shorter and longer terms may be available. Longer policies will cost more than those with shorter terms.
– Value. The death benefit for a life insurance policy can range from $10,000 to $1 million or more. Higher death benefits will result in higher premiums.
– What’s covered. Some term life insurance policies provide provisions for customers who become disabled or require long hospitalization stays. This type of disability insurance is usually added to a term policy and may cost more.
– Risk factors. All insurance companies charge higher premiums to individuals who are seen as high-risk, but some companies specialize in certain risk categories. For example, some life insurance companies specialize in senior citizens and thus offer the elderly lower rates than a company with a different specialization might.
Unsurprisingly, insurance companies offer the cheapest term life policies to individuals who are expected to live past the policy term. This means that young, healthy people pay the lowest rates for term life insurance. It also means that short terms are cheaper than long terms. For seniors, a short term length is generally the best way to get affordable life insurance. At the end of the term, the insured may purchase a new policy for another term.
Term life insurance can be surprisingly affordable, especially for people who are in good health. The best time to buy an insurance policy is when you’re healthy and can qualify for the best values. Even if you’re not an ideal customer, however, you should still be able to get low rates on your life insurance premiums if you shop carefully among your providers. The insurance industry is very competitive, and this competition makes it possible to get a policy regardless of your age, health or habits.