A plan for life insurance cover taken however limited will be a good addition to your early retirement plan.
Things may be going swimmingly now, but you never know what’s around the corner, and there is a chance that your lifestyle could change overnight. So protecting your family and your assets in case the worst should happen is not only the responsible thing to do, but it will help protect your budget planning too.
Health insurance, life insurance, and disability insurance can make all the difference if you do suffer a life-changing event. Income protection is also an important aspect to consider—how well you could manage, and for how long, if you suddenly found yourself unable to earn?
“Insurance is pretty inexpensive, “It’s not something people are happy to think about, talk about, or spend money on, but it can be a lifesaver in certain situations.”
Life insurance will be in force for a particular period that you decided. The most common terms are 10, 20 and 30 years. As long as you pay the premium, the insurance policy is in good order. The premium will never go up even if your health condition worsens.
§ A typical term life insurance coverage policy guarantees you fixed rates. This means that however big the obligations designed to the life insurance coverage, the company will not change terms with time. As policy owner, you make fixed obligations, pay equal amounts at equal times (monthly, quarterly, semi-yearly, or yearly, based on the organization and policy).
§ A typical life insurance coverage policy guarantees a set net off benefit at closure or early collapse of tenure owing to unforeseen circumstances like death. This means that the dying benefit is going to be of a specific amount no matter how long you’ve held the policy. The insurance provider pays exactly the same amount if the insured died on the very first day of coverage as what they would have paid on the 30th year of coverage.
§ The biggest complaint about term life insurance is that you continue to pay and if nothing happens to you, it becomes a sunk cost. Its not a bad thing though, because It’s there for the “just in case” moments of making sure your family is protected. However, you can just let your policy terminate when you no longer need it.
What Term Life Insurance Quotes Are Based On
When applying for insurance covererage, there are some different factors that the insurance carrier’s underwriters will look at when determining the premium to quote for you. These will include the following criteria:
§ Age – Your age can make a big difference in the premium quote that you receive. This is because, as you age, the price of term life insurance can become much higher over time. For those who are young, however, term life insurance can prove to be a very affordable way to obtain a large amount of life insurance coverage.
§ Gender – Your gender can also make a difference in the premium price that you pay for term life insurance coverage. On average, based on statistics, women tend to live several years longer than men do – and because of that, females will usually pay a lower premium price.
§ Height and Weight – Your Height and weight might also be an important factor when determining your premium rates – especially weight as compared to your height. This is because obesity is considered to be a considerable risk factor when it comes to life insurance coverage.
§ Amount of Coverage – The amount of life insurance cover that is being purchased will also factor into one’s life insurance premium rate. In this case, the more coverage you purchase, the higher the premium rate you will pay.
§ State of Residence – Your state of residence can also play a part in the amount that you pay for term life insurance. Some neighborhoods are considered more risky to reside in.
§ Smoking Status – One of the biggest factors in the premium rates for life insurance cover is your smoking status. Those who are smokers can pay up to five times more for their life insurance.
Smoking does not just include cigarettes – but also cigars, chewing tobacco, and other forms of tobacco usage. It even includes marijuana. This high premium price that is charged for smokers can be a blaring sign of just how much this particular factor is so risky to a person’s life expectancy.
Health Status – Most life
insurance applications will require that you undergo a medical exam to determine your overall health status
prior to covering you. This will usually entail the taking of blood pressure
and a heart rate reading, as well as a blood and a urine sample.
These will be tested to ensure that you are in overall good health and do not pose any risk factors to the insurance company in terms of a potential costly claim.
§ Driving Record – Over the past several years, many life insurance companies have also started to look at individual driving records. This is because one’s driving record can also show whether a person may be a potential risk – especially if he or she has some traffic violations on their record in the recent past.
§ Lifestyle – When checking one’s lifestyle, the life insurance company may inquire about any type of potentially risky or dangerous habits such as skydiving, hang gliding, scuba diving, or race car driving (or other similar hobbies and habits) that you may have.
These can pose risk of claim to them – and this may be cause for a higher premium rate on your insurance coverage.
§ Length of Coverage – When evaluating life insurance quotes, the length of the coverage will also play a part in the premium amount they may charge you. This is because term life insurance cover policies can be as short as one year (or even less, in some cases), and as long as 30 (or more) years.
What Makes Term Life Insurance Different
Knowing up front before you buy life insurance how different policies perform can be important. This is because you can use different types of life insurance coverage for various financial needs.
With term life insurance cover in particular, you will be purchasing just the pure death benefit protection only. Typically, this type of coverage is considered to be the most basic form of life insurance that is available in the marketplace.
This is because there is no savings or cash value component – and because of that, the premiums that are charged for term life insurance are usually quite affordable, especially for those who are young and healthy at the time of application.
With term life insurance, however, the policy is purchased for a set period of time. This will often times be for ten years, 15 years, 20 years, or even for 30 years. Policyholders can also purchase a 1-year renewable term life insurance option.
Typically, the amount of the premium will remain constant during the life of the policy. However, once the time frame has elapsed, the policy will expire and the coverage will no longer be in force.
if you wish to remain covered by life insurance, you will need to re-qualify
for insurance depending on your current age and health condition.
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