Major Factors that Determine Your Term Life Insurance Rate
While the economic outlook remains uncertain and unemployment a constant threat to continued financial security, life insurance is making a big comeback. And whether it's an underwater mortgage or skyrocketing health insurance premiums, many individuals recognize the potential risk to their families in the event of a personal has never been higher. Yet, you probably also recognize that you need to find a low term life insurance rate to fit the extra expense into an already tight annual budget. Without any personal information, it's impossible to estimate how much your term life insurance might cost. By taking just a few minutes to fill out NetQuote's short online form, you can generate preliminary quotes for a life insurance policy, but it may also help to take a few minutes to look at the major factors that will determine your individual term life insurance rate.
Two Major Factors for a Term Life Insurance Rate
There are two factors that trump all others when calculating your term life insurance rate: your health status and your policy's death benefit. If you have a health condition that makes you particularly risky to insure--tachycardia with a family history of heart disease, for example--your premiums will be much higher, no matter what other policy choices you make. Some particularly serious health afflictions may make you altogether uninsurable. Likewise, if you want your family to be fully protected by a death benefit of, say, two million dollars, you can expect to pay a higher premium rate, regardless of other discounts.
Other Factors that Determine Your Term Life Insurance Rate
- Long-Term Life Insurance Policies: With most items, the bigger the purchase, the better the rate. With term life insurance, longer-term policies tend to be more expensive for the simple reason that the older you get, the likelier you are to pass away. Longer term life policies can be structured so that higher future rates are accounted for in the beginning, allowing a consistent insurance premium, year-in and year-out. Or, they can account for the higher risk, as you go along, requiring that you pay a slighter higher premium with each passing year.
- Convertible Life Insurance Policies: If you're uncertain of your future life insurance needs, but don't want to invest in more expensive whole life insurance, this is a great option for you. Essentially, by paying just peanuts more for your insurance premiums, you can automatically renew your term-life insurance for a longer term or convert it to a whole life insurance policy at some point down the road.
- Life Insurance Medical Exam and Family History: You may be in good health currently, but other warning signs and markers can still lead to somewhat higher prices. If, during the medical exam, you have slightly elevated blood pressure, this can lead to a higher risk profile. Likewise, if you've been even a social smoker over the last three years, you'll have to pay more for life insurance. Many term life insurance policies don't require a medical exam, but these guaranteed issue policies also tend to cost more simply because the company has less certainty when calculating your insurance risk.
- Personal Profile: There are also several items of personal information that will influence your rates. The three most common items are gender, occupation, and location. The reasons are pretty self-explanatory: Women tend to live longer, some jobs are more dangerous than others, and the air in Seattle, WA is a lot cleaner than the air in Pittsburgh, PA.
Online Insurance Quotes and Preliminary Rates
The best way to shop for a term life insurance rate is over the Internet, at least at first. By simply filling out a brief, online form, you can get matched to several companies that fit your insurance needs and will offer you preliminary rates. This method of soliciting rates is an incredibly efficient way to create a starting point for shopping for life insurance. Indeed, it's hard to underestimate the benefit of calmly shopping for insurance from the comfort of your own home. Be aware, however, that the first rates you see are the lowest possible rates given your basic risk profile. Once you begin discussing actual policies, there is an excellent chance you'll want to opt for a few extra guarantees that will cost a little more.