There are also Life Insurance term life insurance policies, where you pay the same amount monthly for the term of the policy. Another option is Mortgage Life Insurance term life insurance, which is frequently used to protect mortgages. The policy is written to cover the amount of your mortgage and as you pay down the mortgage over time, the coverage amount decreases and so do your monthly premiums.
Why is term life insurance a good idea?
One of the biggest advantages of term life insurance is its affordability. Term life insurance is generally substantially less expensive than other types of insurance. This is particularly true for younger people, under the age of 35 or 40.
If you have a tight budget but still want to protect your family, term insurance might be right for you. A 35-year old male non-smoker can buy a $250,000 20-year term policy for monthly payments of $17.50 to $32, depending upon the company. (Quickquote)
Your age can make a large difference in the price of term insurance, so most experts recommend that you purchase a term policy while you are young. The same $250,000 policy over 20 years that cost a 35-year old only around $20 a month will jump to between $70 and $113 a month for a 50 year old male nonsmoker.(Quickquote) And if you smoke , be prepared to pay up to 60% more for your policy.
How much term life insurance should I buy?
The decision on how much life insurance you need is up to you, but remember to consider all future needs when deciding what amount to purchase. Many Americans think they have adequate life insurance, but with rising costs of living and education expenses, they may not have enough. Up to 60 million Americans have either no or too little life insurance.
Chris Blunt, senior VP of New York Life notes “Say you have a $100,000 term policy. That sounds like a lot of money, but it won’t provide the income to supply a family for very long.” He reports that the average amount of life insurance American consumers have “would replace just 4 years of salary.” (Insurance Newsnet)
Do I need to have a medical exam to purchase term insurance?
It depends upon the company you choose, but the majority of life insurance policies, whether term or whole life do require some form of medical exam. In many cases, particularly for people under 40 or so, this can be as simple as taking blood and urine samples and filling out a form on medical history.
Some companies require a more thorough exam, but in almost all cases, this is performed by paramedical personnel who can come to your home or business. If you are older or have had health problems, an exam by a doctor may be required, which could include an EKG or stress test.
There are some companies that advertise no exam required, but this generally refers to younger customers in good health who are buying smaller policies, for example $100,000 or less. (Insure)