Six Things You Should Know About Life Insurance Rates

Six Key Things to Know About Life Insurance Rates

June 23, 2020Life Insurance

Life insurance is one of the best ways to ensure that after you're gone, your loved ones have the financial security they deserve. But many consumers are baffled by insurance, its terms, and its complexity. Shopping for life insurance rates doesn't have to be so complicated. Armed with a little information and price comparisons, you'll be able to find the best policy for you and your family.

From understanding the primary types of life insurance policies to appreciating the value of comparison shopping, there are a few rules of thumb that are helpful to know.

1. Understand the Two Main Types of Policies

Most life insurance policies fall into one of two categories: term or permanent. Term insurance, as its name implies, is in place for a very specific amount of time, often anywhere from five to 30 years. Term policies also pay out a very specific, predetermined amount.

Permanent insurance, on the other hand, is in place for the rest of your life no matter how long you live. Permanent insurance is usually the more expensive of the two. Permanent life insurance also has a cash-value account that you can access if you need money toward the end of your life.

2. Be Sure to Compare Rates

Just as with any other important purchase, comparison shopping to get the best life insurance rates is key. Be sure to check the rates that different insurers offer. And when you're shopping, be sure you're comparing policies that are similar and that offer similar coverage. You'll be asked to provide information to each insurer you're shopping with, and taking care to provide the same information to each insurer is also important for an effective comparison.

3. Know What Influences Your Rate

Information about you, your personal health, and your hobbies is used to help determine what you'll pay for life insurance. Your weight, gender, smoking habit, and even your occupation are factored in. Women, for example, live slightly longer than men on average and may pay a little less for life insurance. Airline pilots, meanwhile, are considered to have riskier jobs and usually pay more for life insurance.

Because insurers are trying to develop an understanding of your overall health and how much of a risk you pose, you may even be asked to undergo a medical exam before obtaining a policy. Your hobbies will also be taken into account. If you enjoy sky diving, hand-gliding, or scuba diving, expect to pay a little more for life insurance.

4. The Longer You Wait, the Pricier It Gets

Some consumers shop around for life insurance policies, experience a little sticker shock, and decide to postpone the purchase. Here's why that's a bad idea. The later in life that you purchase a policy, the more you'll pay for it. In fact, your age is one of the biggest factors in determining how much you'll pay in premiums. For each year that passes, your premium goes up as much as 10%.

5. Consider the Ultimate Cost

If you look around at various life insurance options, it's easy to get wrapped up in the premiums you'll pay and how they'll fit into your household budget. The premiums are a legitimate factor to consider, but don't let them scare you off entirely from buying insurance.

Keep in mind that the financial pinch that monthly premiums may represent pales in comparison to the long-term ramifications your family would face if they were suddenly without you and no life insurance policy had been established. It's important that your family is adequately insured, and sometimes that may mean cutting back in other areas so that you can afford the premiums on the policy you need.

6. It's Really Doesn't Have to Be Expensive

It's easy to get caught up in all the bells and whistles that can be part of a life insurance policy. Some of those bells and whistles can really add to the price you'll pay, but not everyone needs a fancy policy. In fact, most people don't. A simple and straightforward term life insurance policy is enough for many consumers. Having a no-frills policy in place is a lot better than having no policy in place at all.

Having the right information at your fingertips and careful comparison shopping can ensure that you secure both the best policy for your family and the best life insurance rates. We compare life insurance providers, to help you shop confidentially while keeping your contact information private so you don't end up with unnecessary spam mail and phone calls. And once you've found the perfect policy, we can help you get signed up. Check out The Comparison Company today to start shopping for your policy.

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