Shopping online for term life insurance is relatively easy. Term life insurance has less bells and whistles that you normally find in permanent life insurance. The term policy is a pure death benefit type of life insurance. There are no cash value accumulations, loan values, or partial surrender values in term life insurance. The best way to compare term life insurance rates is to first understand the various forms of term life insurance.
Term Life Insurance Policies
Level Term Life Insurance – This form of term life insurance has a continuous and level face amount during the policy period. There are normally 5, 10, 15, 20, and occasionally 25 year policy periods. Level Term Life insurance is an excellent purchase when you have a consistent debt or income need over a certain period of time. The insurance will automatically terminate at the end of the policy period. Some companies will offer a guaranteed renewable form of level term insurance for a slightly higher rate. Most level term life insurance has a guaranteed conversion privilege. This conversion option is valuable if you become uninsurable because of your health. The term policy is converted into a permanent form of life insurance.
Decreasing Term Life Insurance – This form of term life insurance covers decreasing debt. Mortgage decreasing term insurance is the most commonly purchased decreasing term policy. The insurance decreases at the same approximate rate of the mortgage balance. Decreasing term is usually less expensive than level term insurance because of the declining death benefit.
Annual Renewable Term Life Insurance – This form of term life insurance is by far the cheapest when you start. Every year the policy renews the premium increases with your new attained age. This policy is perfect for short term debt.
What to look for Online
1. Compare the same kind of policy – level term with level term or decreasing term with decreasing term.
2. Compare the same policy period
3. Compare with and without Waiver of Premium – The waiver of premium rider will waive the premiums on your term policy if you become disabled.
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