When you’re purchasing something that’s got to last, and that you’ll be paying on for a number of years, price can be a big concern. With important purchases like this, it pays to check out options and compare costs. Buying life insurance falls into this category.
While you aren’t getting a product that you can drive, touch, or sit in, it can certainly be one of the most important purchases you’ll ever make for your family.
The good news is you may never pay “full price” for your coverage.
Let’s say you decide to purchase $250,000 of level term coverage for 20 years. If something happened to you in the first year, your family would receive the entire $250,000, just as they would if something happened to you 19 years down the road. Also, at no point would you ever get close to paying the “full price” of what your family would receive.
With that said, when you compare prices for policies across companies there are a few things to keep in mind. Not all policies are the same. You’ll need to “pop the hood” and take a look underneath. Consider these factors:
Strength: Do you know about the life insurance company that would issue the policy and what they have to offer? For example, some policies include certain riders at no additional cost, while others charge for them. Take an Accelerated Death Benefit rider, for instance. If you were to become terminally ill, it pays you a portion of your death benefit while you’re still alive. Does that come with your policy, or would that cost extra? What about the ability to convert your term policy if you find you need coverage longer than the term period you selected? Are you able to do that with the policy you’re looking at?
Service: When considering a life insurance policy, factor in advantages such as the ability to contact customer service or speak directly with an agent if you have questions about your policy, premiums, or in the unfortunate event that your family needs to receive the death benefit. While customer service may seem like a minor component now, it can be critical in a crisis.
Exactly What You Want: Sometimes it pays to get exactly what you want, when you want it. If you’d rather not go through a paramedical exam, or you’d like immediate coverage, paying a bit more for those benefits may be the right fit for you.
Remember, price is about more than just a number that you pay for your premium. Be sure to “kick the tires” of the policy before you buy.
1Premiums are guaranteed. They are level for the term period and increase annually thereafter. Premiums above are examples only and may vary based on your personal health history and underwriting guidelines. The answers provided to the health questions are used to determine eligibility for coverage. Not all applicants will qualify. Product and its features may not be available in all states. Coverage ends at age 95.
Traditional Term Policy Form Series: ICC11-1201/TL-1201 (In OR: ICC11-1201).
This is a summary of insurance provisions and does not contain all of the benefits and exclusions. For complete terms of the insurance coverage, please contact your insurance professional or refer to the policy.
Smart financial planning today can leave your family with a debt of gratitude.
An often-heard refrain is, “Buy term and invest the difference.” Others say, “Why rent (term), when you can own (permanent)?”
You’ve taken an important step by deciding to go through the life insurance application process. Here’s what you need to know.