As insurance goes the simplest of all the insurances, a contract between insurance company and insured for a set amount of premiums and a set amount of benefit usually in increments of 10, 20, 30 years. Probably the most used of all the types of insurance and the most under utilized. You see term can be engineered to cover just about anything you have of value for any set period of time i.e. mortgages, loan amounts and of course the value of you to your family. Term is often used to make sure promises are kept incase of your untimely demise, college, house payments, car payments and lifestyles.
Costs
The costs will be determined by a couple of factors, smoking or nonsmoking, type of work, age, sex and where you live. Costs can also vary from company to company so do your shopping and in the realm of term do it online at the hundreds of sites that now offer free quotes, I think we have all seen the ads for coverage of $250,000.000 of term for $15.00 don’t believe them, you need to be 24 years old with no medical records and 1% body fat and live the life of a saint to qualify(it’s a sales pitch to get your info and have a fast talking salesman call you at dinner time on Sunday while the Lakers game is on). A decent policy for a 35 to 40 year old should be about $25.00 to $35.00 for $250,000.000 a month. (Good health, low crime area, nonsmoker, safe job…etc.).
Riders
Riders are just little extras that can be attached to any policy; example could be a rider to include a time period of disability or accidental death. Each of these riders will increase the cost of the premiums but also have added benefits for the beneficiaries. A very popular type of insurance on the market now is home mortgage protection with a return of premium rider, this is just a guarantee to return all of your premiums at the end of the term, it is being sold as a way to start a savings account for retirement. If you bought your home at age 35 and kept it for 30 years, (30 year term) and retired at 65 the insurance company will return all your premiums. Nice little way to start retirement.
Agents
In my opinion the internet is the best place to go if you are buying a small policy (under $200,000.00) for a set period of time, use the internet it’s faster, cheaper and no one in a cheap suite and bad breath will visit your home. Check the company rating (A or better) and compare the rates of at least three companies. This will give you a good idea of what you should be paying.
Companies
There are literally hundreds of good companies today selling over the internet and if your policy face amount is less then $200,000.00 there is usually no need for a medical exam, everything can be done by email and snail mail. If you are supporting a family and have responsibilities, there is no excuse to not have at least a policy to keep your family from having to move after your untimely demise. Stay healthy.
