We all know that it is important to have life insurance. We want to protect ourselves and our loved ones. I want to focus in this article about one specific type of life insurance, term life insurance. These four secrets about term life insurance I am about to share with you will benefit you when you are about to purchase your next plan.
One secret of term life insurance is that it can be renewed after the end of the initial term. This policy is often available in terms or 10 or 20 years. Terms of 5 years, and 30 years are also available. If you have a policy with a specific term, then it will pay a guaranteed death benefit. There are also features for this type of policy that should not be kept secret.
A second secret for a term life insurance policy is that when the term expires, it can be renewed at least once or it will expire. When the policy expires your coverage ceases and a new policy can be purchased to obtain needed coverage. Action is needed by you to prevent your policy from expiring. A notice will be sent before to inform you that your policy will expire.
A third secret of term life insurance is that an insurer will look at your family history when determining the rate or to accept or decline your application. You may pay a higher premium for a policy when there is history of heart disease or other health issues in your family. A pattern of early death is a sign that the applicant may be a bad risk for issuing a policy.
A fourth secret of term life insurance is that your tobacco use will be used as a factor to the rate used to determine your premium. Smoking status is different from insurer to insurer. This means that the use of tobacco is a factor. You do not necessarily need to be a regular smoker to be impacted by the increased rates that are applied. The lowest rates for a policy are always given to non-smokers.
Companies that issue a term life policy may also check your credit history. This is an indication of your character. If you have a good credit history, then you may be given a preferred rate. Applicants having a poor credit history will be given a standard or non-preferred rate for a policy.
Life insurance companies may also look at your driving record as a character reference. When there are multiple tickets or infractions on your driving record, then you may receive a non-preferred rate. If you have a stellar driving history, then you will typically be placed in a preferred rate bracket.
A term life policy will be cheaper than other forms of life insurance. This is because there is no options included on the policy. Less work is required by a life insurance company to service a policy. They will only need to pay a beneficiary when an existing policyholder dies.
One additional secret is that an applicant that exercises regularly will be considered a suitable risk for a preferred rate. You may need to have a medical exam to check your blood pressure and other vitals that are used to gauge your current health. This is a factor used to determine if your health is at an acceptable or unacceptable level.