There are more and more affordable life insurance options with all the companies vying for the business.   On top of that we are seeing people live longer than ever before.    With competition and different product lines that are designed for different lengths and flexibility,  it creates a lot of affordable life insurance options for consumers.   Term life insurance is almost a straight commodity if you have no interest in converting to a permanent plan ever.   Term rates have gone down so much it is pretty staggering.  A couple things to keep in mind is just because a company is saying that a policy could cost X doesn’t mean you could qualify for that rate.   The company who is actually showing up as the second, third, or fourth best quote may actually underwrite more favorably and end up being a better rate.

Other very affordable options are return of premium term,  which will return all premiums paid if you outlive the term.    This will cost more money than regular term, but few people ever die during the term of the policy.  It is especially affordable if you live through the term and get all your money back.   Guaranteed universal life is also considered to be  very good affordable option  and the most affordable for plans that are permanent (guaranteed to 100 or 105).  This type of plan is almost like a permanent term and lasts to 100 or so, but the premium never goes up and little if no cash value is built.

Since term life insurance is basically a commodity the life insurance carriers have had to make it very affordable to compete.   The ability to keep it cheap is centered around a few factors.   One is that the insurance companies rarely ever pay a death claim on a term policy.   Typically, less than two percent of people with term policies ever make a claim.    Since so few people actually die, it is a big money maker for the life insurance company.    It is a win for the consumer because they were able to get a good amount of coverage for a very reasonable price.

The other big factor in keeping the premiums down is that fact that life expectancy has increased.   People are living longer and that contributes to being able to offer reasonable rates to an aging population.   Over the last few years rates have come down to the lowest they have ever been.  In the last couple years, we have seen some companies have modest price increases due to their overall portfolio taking a hit financially.  To make up for their losses elsewhere they had to charge a little bit more for life coverage.

Another main reason, that rates are so cheap is the amount of competition.   With so many carriers offering life insurance at competitive rates, it is imperative to be in that ballpark to be successful selling term.  Some carriers are not trying to compete with their term products as their focus might be on high quality permanent plans.

When looking at what type of life insurance to buy, it is important to marry affordable life insurance with the product that makes sense for your situation.  For example, if you have a child that is 1 years old and you decide you need coverage for 20 years, don’t buy a 10 year term.  The temptation to do that might be there, to save cost, but in the end it may hurt you.   If you go and apply for a new 10 year term at the end of the first 10 year term, you may not be insurable and certainly the premium will be a lot higher.

The first thing we want to look at is how long will you want and need the coverage.   You may want to have permanent insurance, but your budget will not allow for that.   Maybe you can do a combination of term and permanent to meet your budget and your permanent need and want.  It is important to buy the right amount of death benefit above all else.   One case recently, the client wanted to buy 100,000 dollars of whole life, when the need for death benefit was closer to 500,000.   We suggested supplementing the whole life with a 400,000 term rider to cover the additional exposure and the client agreed to that strategy.   Very often we will see a client with a plan that is not budget friendly and the plan type makes no sense.   As an independent brokerage we can shop all the carriers and all the different products.   If a consumer is dealing with a captive agent, they may get stuck with one of the products in the agents limited repertoire.

We speak with a lot of clients that are considered by most companies to be uninsurable and they are looking for other affordable life insurance options.   While not nearly as cost effective as a traditionally underwritten policy, there are guaranteed issue companies.   These companies will write policies that are guaranteed to be issued, even if you are not insurable by traditional standards.  These companies will charge a cost per thousand rate based upon your age.   These per thousand costs will be significantly higher than and underwritten per thousand rate.   If you are not insurable, you really don’t have any other choice than to pay it or not buy it.   The other big drawback of this type of policy is the limitation on the death benefit amount.   Usually the most that can be purchased is $50,000 of face amount.

Another great option is to try and get more coverage at your place of employment.   Group life insurance is guaranteed issue and is usually going to be better terms than an individual guaranteed issue plan on the open market.   On top of potential guaranteed issue plans, there are survivorship policies that can be issued with one unhealth spouse.  If either the husband or wife are sick they may be able to buy a survivorship/second to die plan.   This type of plan unfortunately doesn’t pay until the death of the second spouse, but it may be a good option if a client is not insurable.   Survivorship is used heavily in estate planning and it is less expensive typically than other permanent plans.

What is affordable life insurance?  It is life insurance that you can afford to pay every month to keep it in force.  I think it is important to calculate the appropriate amount of coverage you should have and work from there.   I would rather have you buy all term life if it would allow you to get the appropriate amount of face amount.   For example, we do an analysis and it determines that you should own 750,000 of life insurance on your own life.   The whole life cost will be too expensive and you would only be able to afford about 300,000 of that type.  On the flip side, you can get 750,000 of term and that fits in the budget fine.   Obviously, it makes sense to cover the need, before you figure out what type of insurance you buy.

If we do the analysis and it is determined that you need 750,000, but can only buy 500,000 of term.  While the 750,000 was the ideal number, I would rather you have some coverage than none at all.  If something is not affordable, than it won’t be long before you will stop paying on it and fall behind.   In order to get the most affordable policy on the market search google, it is important to shop it out and compare rates of all the various carriers.  While it is important to get a good rate, it is also important to make sure you get a good value.   Is the company highly rated and what options does it afford you on the conversion side?

Ponte Vedra Beach, Florida –  To find the best value in an affordable life insurance policy comes from an insurance carrier that engages in a “complete underwriting” process of all life insurance policies. If your policy is fully underwritten, then the  insurance company does a great deal of research into a the prospective customers health history before a policy is issued.

Much of this information is used to figure out the likelihood that a policyholder out live a policy. Accordingly, much healthier individuals will be able to get a better rate than unhealthy individuals. Life Insurance Underwriting guides will also look at family health history in many instances, but if a certain lifestyle is designed to counter any known family hereditary health issues, most underwriters will take detailed notes.

What does a health life style have to do with life insurance?  A healthy lifestyle includes a complete list of items individuals do to stay healthy such as; exercise, eating healthy and avoiding bad habits such a tobacco use or drinking to much alcohol. Many  underwriters will also consider the nature of an applicant’s employment history as well as certain high risk hobbies. For instance, a person that sky dives is more likely to die on the job than an lawyer is, and someone who jogs regularly presents less of a risk than an active cliff jumper.  Read More Here At Referenced Article:

http://www.webwire.com/ViewPressRel.asp?aId=111686

Are your family members depending on your income? You can purchase a whole life insurance policy and secure the future of your family members. It is basically a contract between the policyholder and the insurance company. The policyholder purchases the policy and pays the premiums; in turn, the insurance company promises to pay the beneficiary a certain amount of money in the event of the policyholder’s death. 

How it differs from term life insurance 

A whole life insurance policy covers the policyholder for his/her entire life. There is no expiry date and the death benefits are received by the beneficiary only in the event of death of the policyholder. In case of term life insurance, the beneficiary is eligible to get the death benefits for a specific period. You may or may not renew the term life insurance policy after the term expires. 

When to purchase a whole life insurance 

Whole life insurance is a good choice when you want to get the coverage for your entire life. In addition to this, you may also opt for this insurance if you want to build up a cash value of your policy. 

Benefits offered by whole life insurance 

A whole life insurance policy offers a number of benefits that are listed below.

Interest accumulated on this life insurance policy is tax deferred until you withdraw from it.
You can take out a loan from a whole life insurance policy.
The premiums remain fixed throughout the policy term.
You can use the cash value of your policy to pay the premiums.
The beneficiary receives death benefits regardless of when the insured dies.
 
However, you need to pay a higher premium in order to insure your life through a whole life insurance policy. Therefore, before purchasing this insurance, it is advisable that you assess your financial condition and check whether or not you’ll be able to afford the premiums. If required, take help of an insurance agent to decide what type of life insurance is best suitable for you.

This is a popular way to use affordable life insurance.  Mortgage protection is basically a policy that pays a death benefit that will be enough to pay off a person’s mortgage in the event of death.     A term life policy will be taken out for the term of the mortgage.  A level term or a decreasing term product can be used for this, although a level term is a much better value.   Decreasing term has a decreasing benefit, and level term has a level benefit.  Once the term product is selected for 10, 15, 20, or even 30 years, that rate is locked in.   The great thing about term is that the beneficiary can use the proceeds however they want to.  In other words, they can pay off the whole mortgage, continue to make payments, or do something completely separate.

Having a level term policy with the flexibility of the use of proceeds can be very beneficial.   This is a single use of insurance that is only factoring in one debt of the consumer.     Often times there are other debts that would be left to a beneficiary, college funding goals that might not be reached, lost income, etc that need to be considered.  As a single use product, term life can certainly be a perfect fit.

Another type of term product that is being used on a regular basis for mortgage protection is return of premium term.   This is a term program that is level for a period of time (the length of the mortgage) and then if the client is still alive at the end of the term they get a full refund of premiums paid.   The downside to this product is that it is more expensive than a regular term, but guarantees the money back.