What to look for when getting Life Insurance Quotes Online?
One of the best ways to find a good rate for a life insurance policy is to get a quote online. There are any number of online calculators that will help you compare different policies, different premiums, various levels of death benefits, terms, riders and premiums that will help you to find the best life insurance policy for your particular needs. Before you start looking for quotes, though, you need to have a good understanding of your coverage options, and the factors that are likely to affect your rates.
Term life insurance is the most popular, and also the cheapest type of life insurance you can buy. Term life policies are exactly what they sound like - they're temporary. They cover you only for the term you select, which could be as few as three months, or as long as thirty years. It doesn't carry any cash value. If you survive the period of the term, then your beneficiaries don't get a payout. Simply stated, it's a gamble for both you and the insurance company - you're betting on not living out the life of the term, and the company is betting that you will. When you're looking for life insurance quotes online, consider term insurance.
Whole life insurance is, as you might expect, insurance that covers you for however long you live. The premium doesn't ever increase, and when you die, your beneficiaries receive a benefit. It's more expensive than term life insurance, because the insurance company isn't able to gamble on you not living for a specified period of time.
Whole life also returns some of the premiums to the holder of the policy - this is the cash value. Essentially, the insurance company is guaranteeing that the policy will earn interest, which can be transferred over to you as a loan that you can use for other investments, to pay for your child's education, or to use for any other purpose you see fit. You don't have to ever pay the loan back if you don't want to - the balance owing will simply be deducted from the payout to your beneficiaries when you die.
Your insurer cannot cancel your whole life policy, no matter how old you get, unless you stop paying your premiums. When you're considering whole life insurance versus term insurance, you need to ask yourself if term is worth the risk of you outliving the term, and if whole life would justify the higher payments.
With a universal life policy, keep in mind when you're seeking insurance quotes online that the rates are flexible. You can pay more, and the value of your policy will grow proportionally. However, the cash value of your policy will be invested in riskier investments than it would be with whole life. If you're comfortable with a higher level of risk, your policy could grow more in value than would a whole life policy, and it could contribute significantly to your retirement fund. As is the case with whole life, you can borrow against a universal life insurance policy and not have to pay back the loan.
What Affects Your Premiums?
Life insurance premiums are based on your risk of dying. Insurance companies look at the chances, statistically, that you will die while you're carrying the policy. Factors that affect your rates include:
- Whether you've chosen term, whole, or universal life insurance
- Your gender
- Your age
- Your weight
- Your family medical history
- Your current health and whether or not you have any pre-existing conditions
- Whether you smoke or drink alcohol
- If you engage in any dangerous activities or hobbies
- If you're in a dangerous occupation
- If you've been involved in motor vehicle accidents, have a poor driving record (in particular, DUIs) or moving violations
Any combination of these factors could result in you paying higher rates, and if they're in combination, it gets worse. For example, if you have a history of high blood pressure, and you drink or smoke, you can expect your premiums to skyrocket. It's the same if you have driving violations and think that the best way to spend your weekend is to go mountain climbing.
Keep in mind that insurance companies don't all weigh the same risks in the same way. Most insurance companies are dead against smoking - so much so that you might have to pay twice as much for a policy than if you were a non-smoker. But while one company might consider an interest in extreme sports to be a high risk factor, another might think it's no worse than if you operate heavy equipment for a living. So before you choose an insurer, get quotes. There are all sorts of online calculators you can use, and if you don't get the answers you need from using a calculator, you can always go the traditional route and contact one of our licensed agents.