Term life insurance is a type of policy that was developed to provide affordable coverage to individuals on a limited budget. When you have term life insurance, benefits are paid in the event of your death within a certain term set by the insurer. Term life insurance also allows for people to buy larger monetary policies than if they were taking out whole life insurance plans. You can compare the features of term life insurance from various carriers as a way to settle on a policy.
Step 1
Use an online comparison engine to compare term life insurance plans. These engines can give you a rundown of the cost and features of each plan. You will use the inclusions and price to make your selection. One example of a site you can use is Term Assistant (see Resources below).
Step 2
View the term of the policy. The term will affect the premium amount as well as the amount of time that you are guaranteed coverage. Common term amounts are 5, 10, 15, 20 and 30 years.
Step 3
Compare the premiums for the various term life insurance policies. Your goal is to find the lowest premium that provides the most monetary coverage over the set term.
Step 4
Look at whether the term life insurance policy has a renewability clause. This will allow you to renew the policy for another set number of years at the end of the term. This can be an important factor if you don't wish to take out a new policy.
Step 5
Determine whether you have the ability to convert the policy to more comprehensive coverage. You may decide after several years that you want a whole life insurance policy. Before you choose your plan, review whether you can convert the plan and the cost to make this conversion.
Tips and Warnings
- You can make an appointment with an insurance broker to discuss your life insurance options and the best recommended policy for your age and needs.
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