Cheap Whole Life Insurance: Policy, Companies, Rates And Insurance Quotes

Term life insurance provides coverage over a limited time period. After that time period, the insured person may discontinue the term life insurance or extend it by paying annually increasing premiums. The death benefits will be paid to the beneficiaries of the insured person. Term life insurance is similar to other insurances in the way that it fulfills claims based on what is insured - provided that the premiums are paid on time and if the original contract is still valid. Term life insurance is commonly used to cover financial obligations such as the college education of dependents, consumer debt and mortgages.

The most simple type of term life insurance is the annual term. In this type of term life insurance, the insurance companies provide the death benefits if the insured person dies within the one year period. No benefits are provided if the insured dies a day after the last day of the one year period. One of the disadvantages of this policy is the need to get a proof of insurability. For example, the insured person might suffer from a terminal disease during the one year period but not die until after the insurance expires. As a result of the terminal disease, the insured person has a greater chance to be uninsurable once the initial plan expires, and will be unable to continue the plan or buy a new one.

Some quotes have a feature known as guaranteed re-insurability, which allows the insured person to renew the policy without presenting a proof of insurability. Another form term life insurance is the annual renewable term. In annual renewable term, premium is also paid for a year, but the insurance is bonded to be renewed every year for a specific number of years. This period may last from 10 to 30 years, or sometimes until the age of 95.

The guaranteed level premium is a type of term life insurance where the premium remains at the same level for a specific number of years. Usually this has terms that range from 10 to 30 years. In guaranteed premium term, the premium rates are dependent on the total cost of each year's annual renewable term rates. Many guaranteed level term policies have a renewal option that enables the insured person to continue the policy for a maximum bonded rate if the term needs to be extended. This option is normally used if the physical condition of the insured person declines within the term.

Term life insurance and whole life insurance uses similar mortality tables to calculate insurance costs and tax-free death benefits. The premium rate quotes of these policies are different, however. They are different because term policies could expire without insurance companies paying out. On the other hand, whole life insurance policies eventually pay out. Because of its low payout likelihood, term life insurance policies are usually cheap.

Making use of cheap term life insurance may be a viable option for some. Sometimes it is necessary to think about the future today, which is where term life insurance comes into consideration.


Sources:
Hullott, Jason. "Fixed Term Life Insurance Explained." State Farm. 16 Nov. 2007. http://www.statefarm.com/insurance/life_annuity/li fe/term/term.asp.

"Term Life Insurance." Wikipedia. 19 Oct. 2007. 16 Nov. 2007. http://en.wikipedia.org/wiki/Term_life_insurance.< br />
"Term Life Insurance." LifeInsurance.net. 16 Nov. 2007. http://www.lifeinsurance.net/about-term-life-insur ance.htm.

"Term Life Insurance." State Farm. 16 Nov. 2007. http://www.statefarm.com/insurance/life_annuity/li fe/term/term.asp.