You’re ready to get term life insurance, and that’s great news! Comparing policies can be pretty difficult. Like any other type of insurance, there are many features that a term life insurance policy can have. Riders, restrictions, premium cost, benefits, and so much more. Here are some tips on comparing term life insurance, so you and your family can be covered.
Not Just Premium Cost
The premium is one of the first things most people examine. How much will you pay each month to keep your family covered? Before you compare premiums, you should look at the benefits, riders, and restrictions. It can be tough to find two policies that offer the same coverage, but after reading the fine print and coverage details, you can determine which plans are giving you the most for your money.
Term vs. Whole
The first question you may come across is the difference between term and whole life insurance. The main difference between whole and term is that whole life insurance is considered “permanent.” This means that you’ll have your policy until you stop paying or until you pass. Term life insurance isn’t permanent. Instead, you have coverage for a particular period of time. Term life insurance is often cheaper than whole life insurance and can last anywhere from one to 30 years.
Compare Optional Riders
Riders are additional benefits that you can get with your policy that makes it better, or covers areas that are specific to your situation. These options allow you to increase or even limit the amount of coverage set by the policy. Accelerated death benefit rider is one of the most popular riders you can purchase, which allows an insured person the right to use the death benefits under the rider if he or she is diagnosed with a terminal illness that will considerably shorten the insured’s lifespan. As you can see, riders can significantly impact your term life insurance policy.
Review the Restrictions
Life insurance policies don’t have many restrictions or exclusions, but there could be some. Some of the most popular restrictions include a cause of death from war, hazardous occupations or hobbies, aviation deaths other than as a passenger on a commercial airline, or traveling/living in a dangerous country. A country could be considered hazardous if there is a history of political unrest or significant health crises.
Read the Benefits
Term life insurance policies aren’t a one-size-fits-all situation, meaning you may have to comb through several to find one that has benefits that apply to your situation. The death benefits paid to the beneficiary are also different for each policy. While one policy could have a $25,000 maximum, another could have a $250,000 maximum. Since term life insurance is designed to help your family in the event that you pass away, you should read the benefits to make sure the policy provides enough coverage.