Term life insurance does not build any kind of cash value, which makes it an original type of life insurance and considered pure insurance protection. Unlike whole life insurance, term life insurance is only temporary and only covers a specific term, or a specific period of time in a person's life. Benefits will go to a beneficiary only if the insured person dies during that specific window of time.
Term life insurance is usually the cheapest way for people to purchase a death benefit package on a per dollar basis. The reason for this is because the term will expire and the insurer will not have to pay out.
It is recommended that people should purchase term life insurance with the Theory of Decreasing responsibility in mind. The Decreasing responsibility theory is provided that the insured person or persons realizes and understands that any and all financial responsibilities are only temporary and that they should purchase insurance to compensate for these responsibilities.
The easiest and simplest way to purchase term life insurance is on an annual basis. The premium to be paid is only the expected probability of the person dying within that period plus a few extra fees, such as a cost and profit component. Because insurers are able to choose whom they decide to ensure, the probability of someone they choose to insure dying within the next year is extremely low, most people opt not to purchase one-year terms. An annual policy is not very cost-effective either. Many people choose to go with annual renewable terms (ART). In ART, a premium is paid for the coverage of one year and then is guaranteed to be continued each for so an X number of years, which could be anywhere from ten to fifteen to twenty years or more, whatever the insured person decides on. Even though this direction will cause the insured to pay a higher premium, they are more likely to have the benefits paid.
A level term is a very popular form of term life insurance that is a renewable annual term with a constant premium for an X number of years. The years in a term are usually 10, 15, 20, and 30 years. A level term charges a higher premium for a longer amount of time simply because as people get older they are more expensive to ensure, and their age is averaged into the equation for the premium.
Even though they are more likely to be paid the benefits in the end, many people are uncomfortable with regular life insurance for one reason or another. For those types of people, term life insurance is an excellent choice. It gives people the option of having life insurance for a certain period and can be renewed annually or in larger periods.
For more information about term life insurance, visit http://www.terminsuranceinfo.com
Sunday, July 29, 2007
Sunday, July 15, 2007
Ten Tips to Obtain Cheap Insurance
Cheap insurance? Auto insurance, life insurance, health insurance, liability insurance - whatever type of insurance you need, you can buy it for less.
Try the following:
1. Raise you deductible. Why have a $100 deductible if a $1000 deductible won't break you? It may hurt to pay the first thousand someday, but what if meanwhile you saved several thousand? High deductibles mean lower rates. Of course, get quotes with various deductibles, to be sure you're saving enough for the higher risk.
2. Lower your coverage. Insurance agents secretly admit that people usually get sued according to policy limits. You'll be sued for more if your limit is a million than if it's a hundred thousand. A judgement beyond the policy limits is a scary thought, but this can happen no matter what your limits are. If you don't have many assets or much money in the bank, consider lowering your coverage to save money. Get quotes first, of course, to see how much you'll save.
3. Lower the insurance company's risk. Using seatbelts, not smoking, and having alarm systems can mean cheap insurance. Ask your agent about any discounts that are available.
4. Use an independent agent. Why limit yourself to one insurance company? Independents can show you the cheapest policy regardless of which company it's from. Just check a rating service to see if the issuing company is financially solid, especially when buying life insurance.
5. Drop your insurance. The insurance companies will hate me for this one, but consider eliminating some coverages. You need liability coverage on your car, but collision coverage on a $2000 car doesn't make sense. Invest the money elsewhere, and take the $2000 loss once or twice in your life, or maybe never.
6. Buy stocks instead of insurance. If you and your wife both have good incomes, it probably makes more sense to invest your money than to buy life insurance. If loved ones have enough income or assets, life insurance premiums are usually wasted money.
7. Get rebates. Some states that allows "rebating". California law, for example, allows agents to rebate part of their commission to you. If you live in a non-rebating stae, find a California company online!
8. Get the legal minimums. If you have no assets to protect, ask for state-mandated minimums on auto liability policies. Most companies give you their higher, more expensive "company minimums" if you don't push the point.
9. Review your policies. It is common for parents to still pay for health insurance coverage on adult children long after they are working and have their own coverage. See what other unecessary coverages you may be paying for.
10. Get several quotes. For cheap insurance, compare quotes from several companies, and ask about different policy options. One more thing: take notes.
For more information visit: http://www.EverythingAboutMoney.info
Try the following:
1. Raise you deductible. Why have a $100 deductible if a $1000 deductible won't break you? It may hurt to pay the first thousand someday, but what if meanwhile you saved several thousand? High deductibles mean lower rates. Of course, get quotes with various deductibles, to be sure you're saving enough for the higher risk.
2. Lower your coverage. Insurance agents secretly admit that people usually get sued according to policy limits. You'll be sued for more if your limit is a million than if it's a hundred thousand. A judgement beyond the policy limits is a scary thought, but this can happen no matter what your limits are. If you don't have many assets or much money in the bank, consider lowering your coverage to save money. Get quotes first, of course, to see how much you'll save.
3. Lower the insurance company's risk. Using seatbelts, not smoking, and having alarm systems can mean cheap insurance. Ask your agent about any discounts that are available.
4. Use an independent agent. Why limit yourself to one insurance company? Independents can show you the cheapest policy regardless of which company it's from. Just check a rating service to see if the issuing company is financially solid, especially when buying life insurance.
5. Drop your insurance. The insurance companies will hate me for this one, but consider eliminating some coverages. You need liability coverage on your car, but collision coverage on a $2000 car doesn't make sense. Invest the money elsewhere, and take the $2000 loss once or twice in your life, or maybe never.
6. Buy stocks instead of insurance. If you and your wife both have good incomes, it probably makes more sense to invest your money than to buy life insurance. If loved ones have enough income or assets, life insurance premiums are usually wasted money.
7. Get rebates. Some states that allows "rebating". California law, for example, allows agents to rebate part of their commission to you. If you live in a non-rebating stae, find a California company online!
8. Get the legal minimums. If you have no assets to protect, ask for state-mandated minimums on auto liability policies. Most companies give you their higher, more expensive "company minimums" if you don't push the point.
9. Review your policies. It is common for parents to still pay for health insurance coverage on adult children long after they are working and have their own coverage. See what other unecessary coverages you may be paying for.
10. Get several quotes. For cheap insurance, compare quotes from several companies, and ask about different policy options. One more thing: take notes.
For more information visit: http://www.EverythingAboutMoney.info
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