Finding cheap term life insurance is easy. Of the various types of life insurance available, term life insurance is the least expensive. That has a lot to do with the fact that term life insurance is a very straight-forward type of insurance.
You select the period of time you wish the policy to remain in effect (the term), and the death payout amount. All that’s left is to find the agency offering the cheapest term life insurance premium.
Understanding the payout
Life insurance agencies can offer such low cost premiums because they are not necessarily going to have to pay out death benefits. An insurance company only pays death benefits when an insurance policyholder dies within the timeframe the policy covers. Terms range from 1 year up to 30 years.
Since no one can tell the future, it’s not possible to know for certain whether the policy holder will or will not die during the term. Both parties take a gamble on cheap term life insurance.
In the event the policy holder does pass away during the term, the insurance company pays the death benefit to the beneficiary (or beneficiaries) listed on the policy. Death benefits are paid out with a one-time lump sum and this fulfils the insurance company’s obligation. The beneficiary is then free to do with the money what he or she chooses.
The money can be invested so it can be drawn upon as needed, it can be used to pay off the insured’s personal debt, it can be used to maintain the family’s established quality of life, or it can even be used to pay off a mortgage.
One benefit of selecting cheap term life insurance is that your monthly premium payments will always be the same. The amount you pay on the first month is the same amount you will pay on the last month. Having a fixed monthly payment for a fixed number of months makes it much easier when you’re trying hard to manage your finances.
With cheap term life insurance, you get a lot of peace of mind for a relatively small monthly investment. Of course the downside is if you don’t die during the policy term, your life insurance will simply expire and you won’t be able to recoup any of the money you’ve paid towards the policy.
How cheap is cheap?
Several factors are involved in determining how cheap your cheap term life insurance will be. Your age and your general state of health are big considerations. The younger and healthier you are, the less you will pay. If you are overweight and/or are a smoker, expect your rates to be higher. The life insurance coverage period matters, too.
And believe it or not, your occupation has a lot to do with how cheap your term life insurance is going to be. The more likely you are to die while on the job, the more the insurance company will want to charge.
