Which Factors Determine the Best Term Life Insurance Policy?

There are an abundance of insurance firms offering term life coverage, but how can you tell which is the best term life insurance company?  To ensure that you and your family are well protected, make sure your term life quote meets several important criteria.

The best term life insurance policy is renewable

When you are shopping around for life insurance coverage, the best term life will enable you to renew your policy year-after-year.  You want to ensure that the policy guarantees your ability to renew the policy annually at the same rates, without the need to undergo another mandatory health examination.

How long is the term life?

When you are looking for the best term life, you will most likely face a medley of options for length, ranging from one year to 30 years.  Each one of these options are priced differently, with both advantages and disadvantages.

If you choose a term life policy that extends over 30 years, the rising cost to insure your increase age is spread throughout a longer period of time – which will give you a lower overall annual rate.  With this in mind, it is important to remember that you are essentially paying higher costs in the earlier years (when it is cheaper to obtain insurance) to make up for the discount in later years.  Therefore, if you decide to cancel the policy only five years into the term, you will have overpaid for the protection.

With that said, a shorter term policy will reduce your costs in the interim, but keep in mind that when you opt to renew your insurance when the term expires, you will face greater annual fees – as you will be older, and therefore, “riskier” for even the best term life insurance companies to cover.

Regardless of which option you choose, a term life insurance policy will keep your annual premium the same each year for the entire policy term.  This ensures that even as you age, or perhaps fall ill, you can still maintain the same rates.

The best term life insurance policies offer convertible options

The debate will always continue to rage between term versus whole life insurance policies.  Indeed, both policies present different sets of advantages and disadvantages.  To give yourself the option of switching to whole life insurance later in life, should that suit your financial needs at that time, the best term life insurance companies will offer “convertible” policies.

For example, in 25 years, you may feel that you would like to boost your retirement planning and savings.  By having “convertible” term life coverage, you can switch it into a cash-value option – which would give you both a quasi-savings account and annual returns based upon interest or dividends.  While term life may be ideal for you at a younger age, having the “convertible” option always leaves the door open for a whole life policy.

The best term life coverage will provide you with a renewable guarantee, along with a promise that your rates will stay the same throughout the course of your covered term.  In addition, it will give you a “convertible” option, which gives you greater flexibility in the future.