Ingenious Ideas Can Bring Down the Term Life Insurance Cost to a Large Extend By David Livingston At Isnare.com Ezine Articles

The high cost of the life insurance premiums serve as a prohibitive that turns people off from buying insurance policies. The buyers are also usually disinterested and unaware of the different types of policies available and are hence not too keen on life insurance. For those interested, there are some unconventional ways of reducing life insurance premiums, especially term life insurance cost.

Term life insurance is the original as well as the purest form of insurance. It is the most inexpensive way to purchase a substantial death benefit. There is no accumulation of cash value. The beneficiaries get the benefit if the policyholder dies within the term. They do not get anything, if the policyholder dies, even one day after the policy has expired. Studies have shown that probability of filing a death benefit is as low as 1% in term life insurance. In other varieties such as whole life insurance or universal life insurance there is not only an accumulation of cash value, benefits have to be given in cent percent cases. Thus, term life insurance cost is less than permanent or universal life insurance cost.

All of them use the same mortality tables for calculating the cost of insurance and death benefit, as long as policy is in force and premium is current. The reason that the costs are substantially different is that the term insurance may and in most cases do expire without paying out any benefit, while the other insurance must pay out eventually.

The Term life insurance cost can be cut even shorter if the buyer increases his keenness about it.

1. A fast-life leader may well have to adopt a more sedentary lifestyle. Obesity is another no-no so join a good gym soon if you are so. The cheap life insurance rates can be obtained only if the buyer is physically and mentally fit. The body mass index is something the modern life insurance agents are very particular about. An overweight person pays more premium than right-weight ones.
2. Besides obesity, smokers or drinkers also pay more premiums. Smokers may pay up to 40% more than their non-smoking counterparts. If one quits smoking at least a year prior to purchase, the premiums shall be lowered.
3. Purchase insurance policy early in life. Term life insurance cost is always less if you are young and healthy.
4. It is necessary to buy term life insurance for the correct period. Making the term lesser can affect life insurance rates drastically. But too much lowering is also not good as then the buyer would have to pay through his nose during policy renewal. Also, there is the risk of acquiring a fatal disease in the term period in which case the the insuring company may not agree to renew the policy. This makes the previous hard-earned payments futile.
5. If you think you need coverage for 35 years, buy term life insurance for 35 years only, neither more , nor less. Experts say that you should be covered by term life insurance until you are 65 years old. By that age, you should be free from all liabilities.
6. Keep in mind, higher the coverage rate, higher will be the term life insurance cost. To calculate how much your family will need in your absence, multiply your annual income by 15.
7. Shop around a bit. Take quotes from different carriers, or even from several brokers. Know that agents represent one particular carrier, while brokers represent many carriers. Reputed brokers will deal with financially strong carriers only, if not for anything else, for their own goodwill, as goodwill is their only capital.
8. Do not look for price alone as you look around, for sometimes cheap life insurance rates are not accompanied by appropriate covers.
9. Check out the options on life covers. Family Income Benefit is offered by some carriers which involves payment of benefits monthly instead of annually. These provide cheap life insurance rates and may also pay more than the pre-decided amount if the policy buyer dies early.
10. Other schemes like which are good for paying mortgages and also have cheap life insurance rates.
11. To decide whether payment is made monthly or annually is done on the basis of the associated term life insurance cost. Monthly payments may have additional costs.
12. Consult brokers and agents. They are sure to provide other smart ways of reducing cost of insurance.

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