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Understanding the Finer Lines of Term Life Insurance Rates

Author: David Livingston

If you were a life insurance agent, you would have met different types of clients.

Some of them know nothing about life insurance. They want to buy a policy because everybody they know have done so.

Some of them know what they want and you cannot talk them into buying something else.

Some have heard about different categories of life insurance plans, but do not have any clear idea about them. They are the ones who keep asking if they should buy term life or permanent life insurance.

It is very difficult to answer the last question. One needs to understand the financial condition and the aspirations of the person concerned before deciding which type of insurance will suit him. One should ideally go through needs analysis for this. However, most of them do not want to disclose too many personal details and so whatever policy they buy is either recommended by or purchased by somebody they know.

Buying insufficient coverage without any financial calculations may lead to major financial crises after you are gone. If you don't want to disclose your financial assets to the agent or broker, then there are various other ways of arriving at the correct face value. One of the ways of doing the needs analysis is by using a needs analysis tool. This needs analysis tool is a software application that takes all current key financial data and then does a calculation based on certain predefined formulas and gives you an accurate face value.

Another important dilemma faced by the perspective policyholders is what should be the face value of the policy. That too needs precise calculations. Buying insufficient coverage may spell disaster for the family in case of premature death of the policyholder. At the same time, a young man with a growing family cannot really afford to pay too big a premium. For such a person the ideal policy is the one that has a wide coverage at cheap rates. Ideally, a term life, which offers nothing but death benefit, provides sufficient coverage at quite an affordable rate.

One needs to calculate the face value accurately for the optimum benefit. If you really do not want to talk about your financial condition, you can calculate the face value on your own. You either multiply your annual income before tax with fifteen or use the needs calculator available with all the reputed brokers. It is a software application that uses some relevant financial data and certain predefined formulas to calculate what the face value of your policy should be.

Although there is no savings benefits with term life insurance, you can expect cheap rates for this kind of life insurance. The younger you are; the lower are the rates. For example, a 40 year old male will have to pay approximately 10 to 20 times more term insurance rates as compared with a 20 year old male. So, it makes more sense to buy the term policy when you are just in your early twenties. If you are working parents, then each of the spouses can have a life insurance.

As I said, the younger you are the better. If you want affordable term rates, buy life insurance policy early in life, at least before you cross 35. Apart from that:

1. Quit smoking; smokers have to pay premiums at a very high rate.

2. Reduce your weight. Higher body mass ratio means higher rate.

3. Take care of your general health. Healthier you are, less likely you are to die within the term and so the term life rates are less.

4. Calculate the coverage period and the face value accurately to keep the rates low.

The policy is a very important document and if there is any number mentioned on that policy, make a note of it and then store the policy at a very safe location. So, points to remember about the policy are:

o Check the term life insurance rates

o Read it properly

o Store it properly

o Review it from time to time

David Livingston has been involved in the insurance industry for a long time and is considered to be one of the leading expert in this industry. For more information on how to get affordable life insurance or getting life insurance quotes, visit his site today.

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