Best Life Insurance Rates
Life insurance rates have been at the center of much controversy in the past and I expect they will be debated in the future as well. At the center of the problem life insurance companies as well as their agents try to project their rates as the best and, where they can, the lowest.
To get a true picture and a fair comparison we first of all need to compare apples with apples. We need to look at the different types of life insurance and get an appreciation of which life insurance rates are supposed to be lower and why…
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With so many different term insurance policies and even some fairly new ones we can’t just say term life insurance rates are the cheapest or conclude that term policies are the best.
With the return received in the form of cash values and dividends we cannot categorize whole life insurance as the most expensive. There are too many variables. Each person must evaluate them and come to an informed conclusion. We have to decide what fits our unique situations.
The person with a tight budget, who has little money to spend on life insurance, who needs a large amount of life insurance may be better off with term insurance but s/he must decide on the type depending on his or her particular need.
On the other hand the person who has their investments well taken care of and has a great amount of spendable income may choose to buy whole life insurance in some form and use the cash value as a cushion in case a sudden need for extra cash should arise. I am going to try to list each type of life insurance policy, show you where they are most used as well as make a comparison between term life insurance rates and whole life insurance premium rates.
Decreasing Term Life Insurance
- Decreasing Term Life Insurance
One of the lowest term life insurance rates is the decreasing term policy. If you have a need for life insurance which will decrease over the years then this type of life insurance may be for you. While the face amount decreases the premium remains level.
This policy is more often than not used to take care of the balance owed on a mortgage in the event of the demise of the homeowner. Because it is very cheap the buyer loves it. The bank or mortgage company love it too because they are assured they will get back their money.
- Increasing Premium Term Life Insurance
If issued by the same life insurance company as the decreasing term, the increasing premium term life insurance policy starts out with life insurance rates quite similar. Although the face amount remains level the premiums on this one increases every year as the insured gets older. So it starts out very cheap but every year becomes more and more expensive.
If you have limited cash this policy can become quite expensive after about 5 years. In fact the life insurance rates can be quite prohibitive if you keep it long enough. So if your need for life insurance is very short term this policy can be a very good one to buy.
- 5 Year Level Term Life Insurance
People, and businesses alike love to take out loans for short terms like 5 years. A 5 year level term policy can be quite an effective tool when used to cover that loan. If the insured should die while there is an outstanding debt this policy will pay off that debt.
The face amount remains level for the entire 5 year period and so does the premium. Let us suppose you have a grandchild for whom you want to pay college costs. You know you will accumulate sufficient funds over the next 5 years, but what if you died before you got there. You could use cheap life insurance rates of the 5 year term policy to guarantee the fulfillment of your desire.
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- 10 Year Level Term Life Insurance
The 10 year term life insurance rates are a little more costly than the 5 year term but it would be worth the extra expense for those who need life insurance for a little longer period of time. Here you are getting a level amount of life insurance with a level premium for ten years. Let us say you are a single parent with a 12 year old child.
You feel that all you need this policy for is to guarantee that your child will be taken care of financially until s/he graduates college. You may have other life insurance for other purposes. The 10 year term policy could fulfill your need for your child’s protection. It would be wise, in this case to set up the proceeds to paid in the form of an income upon your death.
- 20 Year Level Term Life Insurance
It is not only the life insurance rates of the 20 year policy that most people love. This is a level death benefit policy for 20 years. The premiums also are level throughout. Most people like the 20 year period.
This seems to be a reasonable time to plan with life insurance for most people. If before the end of the 20 year period you feel you will still need life insurance you can always convert the policy even if you find yourself uninsurable.
- 30 Year Level Term Life Insurance
This one is becoming more and more popular as time passes. The level life insurance rates are fairly inexpensive even though they are a little more than the 20 year term. The death benefit is level.
This is ideal for a young recently married couple especially if they plan on having children in the near future. 30 years is a reasonable time to plan for life insurance coverage. You can always convert the policy if you feel you will need life insurance after the 30 year term period runs out.
- Whole Life Insurance Policies
The whole life insurance policy comes in many forms but it started out originally to be basically an endowment to age 100. As time went by the premiums were lowered and as a result it did not endow anymore. You have a level death benefit for the entire life of the policy.
If you should die at any point during your ownership of this policy the life insurance company will pay the face amount to your beneficiary either in a lump sum or in the form of an income.
The whole life insurance rates are higher than those of term insurance but it has what is called cash values. If you should need to put your hands on some cash in a hurry you can get it from your whole life policy after it has been in force for a few years.
These cash values together with the dividends can also be used to prevent your policy from going into a state of lapse if at some point you are unable to come up with your premium. This policy can be used for just about any life insurance need if you can afford the life insurance rates.
- Waiver Of Premium Rider
The very inexpensive life insurance rate for a waiver of premium rider may be added to any of these policies. If you should become disabled you will find it worth the small cost as the life insurance company will pay the premiums for you during your disability. You must be disabled for at least 6 months.
- Accidental Death Benefit
You can also add the accidental death benefit to any of the above life insurance policies. If you should die in an accident the life insurance company will pay twice the death benefit to your beneficiary. The price is a little more than that of the waiver of premium rider.
All of the above should be considered when selecting the best life insurance rates for your family as well as your business.
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