If you prefer a lifestyle that include financial security and peace of mind, consider obtaining life insurance coverage. You’ll get the best deals if you are young and in good health, but there are plenty of ways to save and lots of options when it comes to types of policies. Of course, it’s always wise to speak with a trusted agent who can shop around for the best rates and help you figure out how much protection you can afford. Even if you’re already familiar with the industry and own a policy, review the following facts about life insurance to gain a deeper understanding of how carriers set premiums, evaluate applicants, and more.
Anyone Can Buy Life Coverage
There are definitely occasions when you need a lawyer but buying life insurance is not a common one. No matter your health or age, or even if you’ve been diagnosed with a terminal illness, it’s possible to purchase a life insurance policy. Expect high rates and low coverage limits, but guaranteed issue contracts are often a smart way to cover final expenses and provide at least a modest benefit payment to beneficiaries. Just beware that most of these policies have a two-year waiting period before they pay the death benefit. If the insured dies before the two years are up, all premiums are returned to the beneficiary or the estate of the deceased.
You Can Sell a Policy
Many policyholders are surprised to learn, when they read the contract’s fine print, that they can legally sell a policy under certain circumstances. It’s actually rather simple and hassle-free to sell via a life settlement. It’s an arrangement in which you sell the right to the death benefit amount to a third party in exchange for cash. What you receive varies, so it’s wise to review an online guide that explains all the details of the process.
Term is a Bargain
If you’re not interested in building cash value or being able to borrow against your insurance contract, consider purchasing term rather than whole coverage. Term is simple, inexpensive, and typically does nothing more than pay a death benefit to your stated beneficiary should you die before the stated term is up. It’s your decision how long of a term to choose. Most carriers offer periods that range from 10 to 40 years.
Only a Few Factors Determine Rates
For the most part, when you purchase any kind of coverage, but especially whole life policies, there are five key factors that affect your premiums and payouts. Keep in mind that each carrier emphasizes different components, but nearly all of them look at your medical history, gender, overall health status, whether you smoke, and your age. Those five things weren’t chosen at random but are based on long-term statistical research done by technicians called actuaries, whose job it is to calculate the life expectancy of people based on their lifestyles, behaviors, and health. In general, you’ll get lower rates if you’re younger, don’t smoke, are relatively healthy, are female (women typically live longer than men, on average), and don’t have a family or personal history of poor health or inherited diseases.