Affordable Term Life Insurance is a Reality if You Can Keep Yourself Fit By David Livingston At Isnare.com Ezine Articles

Affordable life insurance with no exam policies seems Godsend in today's world. However, you should pause and enquire how is that possible? After all insurance companies are here to do business and to earn profit. Then how can they insure a person without knowing what is the actual condition of the person's health is?

The business model of any life insurance company can be simply put in the following way:-
Profit = earned premium + investment income ' incurred loss ' underwriting expenses.

The insurer selects the risk to be insured and then decides about the premium that should be charged in return of the coverage of the risk and it is derived by the process of underwriting. Absence of the medical test makes it difficult for the insurer to know about the risk that is to be taken. How shall he decide upon the premium amount that a person should pay? Be sure that in such cases there are clauses that either you did not understand or you did not look for them because you did not expect them to be there.

If you think that life insurances are not affordable, let me clear your conception. Buying insurance policies is just like buying anything else. Today things have become very easy all that you need to do is to select a policy. It is very important for you to know about the different types of life insurance policies available in the market so that you can select the best option for yourself. The two most important ones are:

1)Term Life Insurance Policy is for a set period. You buy the policy for 5 years / 10years / 15years / 20years / 25 years / 30years period, which is as long as you need the coverage. You can renew your policy after that period, but the premium charged will be higher. In this type of insurance, the insurer will pay the benefit to your beneficiaries only if you die within the term period.

2)Whole Life Insurance is for whole life. You keep on paying premium as long as you live and once you die and if the premium paid is up to date, your beneficiary will get the benefit. Unlike the Term Life Insurance, here is a cash build up and the insurer has to pay the benefit almost in all cases.

If these two policies are compared then term life insurance will be a better option. When it comes to premium it is obvious that the whole life insurance or other life insurance policies will have a upper hand because these policies guarantees a return and a cash build up in the end. In the case of a term life insurance there is no possibility of cash build up and as the benefit s provided only for a certain time so most of the time the insurer does not have to pay any benefit to the beneficiaries.

Then, why does one go for term life insurance at all? They do so just to ensure that their loved ones do not face financial hardship if by chance something happens to them in future. The premium they pay buys them mental peace, they are happy in the thought that their loved ones are totally taken care of as much now as in the future.

It is not so simple to get an affordable term life insurance policy because for this you need to have a good self control. If you smoke and you are overweight you are entitled to pay a higher premium as you are prone to various diseases. A woman 5' 6'' can weigh up to 220lb without attracting higher rate. Crossing this line can make you pay a higher rate.

Premium rates also depend on the length of term, the coverage amount, age etc. If the term is only five years and you are healthy enough, the premium charged will be affordable. However, when you try to renew the plan after five years, you will find the rate quite enhanced, yet affordable. When you go to renew for the second time you may find that it is no longer affordable. If you become terminally ill within that period, but do not die, you may find the insurer is not willing to insure you anymore. Therefore, in the end, the affordable term life insurance does not remain affordable at all.

some points that should be kept in mind to make it more affordable are:
* Decide what should be the exact period of coverage
* Decide how much coverage your family will need in the future
* Next contact some reliable broker
* Receive life insurance quotes from him
* Fill up the quotes
* On the basis of the quotes the broker will supply the most suitable rates
* The premiums will be fixed on the basis of rates
* So make the correct quote to get the most affordable term life insurance policy

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