How To Find The Lowest Term Life Insurance Rate

The term life insurance rate depends upon the type of policy you choose to go for. However, one thing is for sure that no matter which type of term life policy you are considering to sign up for, it is still the least expensive option for you in comparison to other types of life insurance available, such as endowment, universal life, whole life insurance, etc.

The reason for term life’s low rates lies in the fact that unlike other insurance policies, there is no cash value associated with a term life policy. Whatever you pay goes toward paying for insurance only. What is more, these policies are available for different terms, such as five years, ten years, fifteen years, and even as long as thirty years. The longer the period is, the higher the premium and rates will be.

Choosing From A Variety Of Options

Let me first give you a brief insight into some of the different options available to you and how they affect the term life insurance rate.

  • The non-convertible or non-renewable term policy expires when the term ends, but it does not give you an option to renew the same. If you still want a policy, you will have to sign up with a new one.
  • The renewable term policy, on the other hand, offers you an opportunity to renew the same when it expires. The company will not ask you to go through a new medical exam.
  • Some people confuse the convertible term with renewable policy. These are however two different things. You do not get conversion privilege with the renewable term. You can only renew the policy. You cannot convert the policy into endowment or whole life policy. For that, you need to sign up with convertible term. The term life insurance rate is a bit higher in this case.
  • On the other hand, if you are looking for the cheapest of all term life policies, you should look no further than re-entry term. However, the qualifying criteria for this policy are not that easy.

Increasing Term Vs Decreasing Term

The face value on an increasing term policy goes up regularly each year. These policies are only sold as a rider. On the other hand, in case of decreasing term, the face value goes down with time. These policies are also popularly known as mortgage life insurance, as majority of people use it to pay off mortgages.

Therefore, information is the key to get the lowest term life insurance rate. The more informed you are, the better decision you will be able to make.