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Introduction
Has life ever became uncertain to you? Do you know someone healthy and having the time of his life suddenly passing away due to a car accident leaving his or her legatees with burdensome financial expenses such as loans, mortgages, and funeral expenses? Are you related to somebody who was once in good financial standing but had to sell most of their properties to get medical treatment for some critical illness? Or are you prepared to face whatever life throws at you because you know you are covered?
Whatever it is, we all know that we all have one experience. It is just designed that way. But would you really let your loved ones carry this load in the event something happens to you, or would you like to leave a legacy and get them to have less financial worries while you're gone? It is the latter, right?
Well, life insurance in general, and term life insurance in particular can help you have them covered in case something happens and you pass away. Some questions may be running in your head right now like:
This page answers such questions and others in the best way possible.
You would have probably heard life insurance for so many times, but you may have not truly grasp it. So, let us start on the right note by defining what life insurance is and its types.
Life insurance is a contract or agreement between an insurance provider; a company and a policyholder that in exchange for regular premium payments. The insurance provider will pay the named beneficiaries of the insured, an agreed amount in the event he or she dies (also called death benefit), becomes disabled or gets sick. Its premium rate varies according to some factors, such as but not limited to, the following:
Age : As the policy applicant age, the higher their risk of getting sick, therefore the higher their premium rate will be.
Occupation : The riskier the work of the policy applicant, the higher his or her premium rate will be or the higher the chance that his application for insurance coverage will be denied.
Medical History : The more complicated the policy applicant's medical history is, the higher his or her premium rate will be or the higher the chance that their application for life insurance coverage getting denied.
Extreme Sports & Risky Hobbies : The more extreme and risky the sports and/or hobbies of the insurance applicant, the higher his or her premium rate will be or the higher the chance that their life insurance coverage application will get denied.
Those mentioned above are only a few but significant factors that affect the premium rates of the life insurance applicant that the best term life insurance companies take in to consideration. So when you apply for term life insurance quote and wonder how your term life insurance rates are calculated, keep that in mind.
As you probably know already, life insurance has two common types, term life insurance and whole life insurance (also known as permanent life insurance), and each type is broken to more categories. The table below visualizes it.
There are two main life insurance policies that you should consider, whole and term life insurance:
Whole life insurance is a type of life insurance that provides coverage from the date of insurance application approval until the unfortunate happens, given that the premiums are paid on time. It has a savings component, called cash value, that builds over time and which the insured may withdraw or take a loan from for a certain fee. Its death benefit is guaranteed given that the premium payments are settled. It has three types, the traditional or permanent, which is the most commonly whole term life insurance, the universal life which offers adjustments on policy terms, and the universal variable experience, which has investment components. Full life insurance is complicated. It is infamous for its cost and more extended period of paying, thus a separate article may be provided for whole term life insurance. However, a comparative table between the types of life insurance is presented below for an easy run down.
Term life insurance, on the other hand, is a type of life insurance that expires. It only offers protection for only a specific period as its name hints, usually to secure loans or mortgage financing. It can either be renewed or outlived. At the end of the term, the premium payments must be complete, and the protection coverage will cease. The best term life insurance usually addresses the need for protection from loss of life, disablement and diseases. There are two types of term insurance:
Decreasing term life insurance is a type of term insurance whose only difference is that its protection coverage falls during the term of the policy at a given or predetermined rate. The life of the system and the premium rate is fixed throughout the life of the plan. Creditors usually require a term life insurance policy to their debtors as the principal amount due decreases over time.
Level term life insurance is the most common term insurance in the market. It is also sought after because upon application for insurance coverage, the applicant may request for the face amount or sum insured, and the number of years (from 5-30 years) that the coverage will last. It is called level because not only is the term of the policy fixed, but also the guaranteed death benefit is, and the premium rate is the same. It is renewable, but upon restitution, the death benefit may change, and the premium rate may rise due to an increase in the applicant's age.
Unlike whole life insurance , a term life insurance policy does not have cash value.
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| Customer Type | Coverage Amount | Whole Life Cost | 20 Year Term Life | 30 Year Term Life |
|---|---|---|---|---|
| 30 year old male | $250,000 | $180 | $12 | $19 |
| 30 year old male | $500,000 | $355 | $19 | $31 |
| 30 year old male | $1,000,000 | $700 | $31 | $54 |
| 30 year old female | $250,000 | $160 | $11 | $16 |
| 30 year old female | $500,000 | $310 | $16 | $26 |
| 30 year old female | $1,000,000 | $620 | $25 | $44 |
| 40 year old male | $250,000 | $266 | $17 | $28 |
| 40 year old male | $500,000 | $530 | $29 | $50 |
| 40 year old male | $1,000,000 | $1,050 | $49 | $90 |
| 40 year old female | $250,000 | $229 | $15 | $23 |
| 40 year old female | $500,000 | $449 | $24 | $39 |
| 40 year old female | $1,000,000 | $899 | $42 | $75 |
| 50 year old male | $250,000 | $415 | $39 | $67 |
| 50 year old male | $500,000 | $825 | $70 | $125 |
| 50 year old male | $1,000,000 | $1649 | $133 | $242 |
| 50 year old female | $250,000 | $355 | $29 | $49 |
| 50 year old female | $500,000 | $709 | $54 | $92 |
| 50 year old female | $1,000,000 | $1399 | $99 | $175 |
So how much does term life insurance cost? we are starting with the average whole and term life insurance cost/rates in 2020 for different customer types, since many are interested in that, especially those who are new to life insurance and those whose looking for low cost, affordable, cheap term life insurance quotes.
As you can see in the table above, term life insurance ultimate edge over whole life insurance is its cost. Assuming that the coverage is just for a specific period and the only guaranteed outlay is a death benefit, then it is expected that it is much more affordable. On the side is average premium rates comparison of term life insurance over whole life for both gender, and various ages who are non-smokers.
Disclaimer: As stated earlier, other factors affect life insurance. The table only reflects the average life insurance cost per month. It is best to compare rates and get term life insurance quote that is tailored to you through our cheap term life insurance quotes comparison tool at the top of this page.
Aside from the guaranteed death benefit while the plan is in effect, an insured may enjoy the following services to wit:
1. Most comfortable and most affordable life insurance to buy
Given its nature, most term life insurance will not require a medical exam. Also, since only the guaranteed death benefit is the only outlay, it is much cheaper. Thus, it is the most accessible and most affordable life insurance.
2. Can be used as additional temporary coverage with a permanent life insurance policy
3. Available in a various term such as the following:
Short term life insurance – This usually provides a year or less of coverage and usually bought for a specific purpose such as the following:
An additional layer of coverage for travellers
An extra layer of coverage for individuals who may be exposed to a dangerous situation or activity temporarily
Serves as a guarantee of payment for a substantial short-term loan or business transaction.
20 year term life insurance – This is a more attractive term life insurance as one can be protected for two decades at a lower fixed premium amount. The feeling of confidence brought by financial protection is possible because of this term life insurance policy. The 20-year term life insurance is typically acquired for the following purposes:
Family security is essential, but when there is so much more on your plate for the next 20 years, and you cannot afford a whole life insurance policy, yet, this is an excellent option.
A 20-year term life insurance policy can be a debt guarantor instead of your parent or sibling or other important people in your life.
A 20-year term life insurance policy can be supplemental insurance in the event one changes his/her family structure.
30 year term life insurance – This is by far the longest-term life insurance one can secure while he is younger and healthier. Usually, young professionals ages 18 to 30 choose this term to enjoy the peace of mind given by life insurance for the longest time at a lower fixed amount of premium. Anyhow, the insured can request for conversion when his budget will suit him or when the need arises. The 30-year term life insurance is typically acquired for the following purposes:
A 30-year term life insurance is a good option for people who have dependents with special needs like ageing parents or disabled or exceptional children.
A 30-year term life insurance is also a good option for a young couple who is planning to have a family shortly. With this term life insurance, their children are already capable before their insurance matures.
A 30-year term life insurance policy may also be a supplement of an investment plan since investment plans do not pay out guaranteed death benefit.
Getting cheap term life insurance is not its only benefit; it offers additional features too, to wit:
Many term life insurances may be converted to whole life insurance; it is called convertible term life insurance. Conversion should be made while the policy is still in force. Once the policy is converted, the insured can enjoy the following:
The policy now covers the entire life of the insured.
The policy may start to earn cash value, the savings component of whole life insurance, which can be withdrawn or borrowed.
The insured can add more value to its plan called riders.
The insured does not need to undergo a medical exam.
Depending on the life insurance provider, there are so many ways to add value to a term life insurance plan at a fee with so-called living benefit riders.
The most discussed is return of premiums. Traditionally, there is no return of premiums when the term life insurance matures, or it is outlived by the insured. However, to address the insistent public demand, the insurance commission has approved the return of premiums as a living benefit rider. Many insurance companies now offer it at a certain fee. So, if the insured was not able to use his policy, he will receive a refund of a certain percentage. Below is a comparative sample computation of a 30-year term life insurance with return of premiums and without it, of a 35-year-old non-smoker male prepared by insuranceglobe.net for everyone's appreciation.
Some decades ago, insurance was considered an additional unnecessary expense which makes many of our senior citizens unprepared for their retirement or demise. If not their family, maybe the government will take charge of their final costs, that is living their survivors with loans or no income at all. Thanks to term life insurance, seniors can now be safeguarding their loved ones from massive funeral and burial expenses and leave their survivors with both legacy and peace mind. Due to the natural health decline that comes with age mostly, term life insurance rates for seniors are generally higher, and the term will be a little shorter...
You have reached this section, so probably we have made our point, and you are now ready and shopping for term life insurance online. Here are the companies that we think, based on our experience, research and overview, deserve your closer look and attention, including some pros and cons and their term life insurance cost.
State Farm Term Life Insurance: Best for Return of Premium| Pros | Cons |
|---|---|
| Term life insurance policy is convertible | Online term life insurance quote is not available for all products |
| No medical exam term life insurance is available | Age and benefit restrictions applied for no-exam plans |
| Provides a wide range of life insurance options | Capped final expense policies at only $10,000, which can only cover funeral expenses. Burial and memorial expenses may reach $4,000.00 |
| Top-rated return of premium available | |
| Top-rated term life insurance provider and strong financial ratings |
Read more: State Farm Insurance Reviews
Ladder Term Life Insurance: Best for Online Term Life Insurance for 20 to 60 Year Old
| Pros | Cons |
|---|---|
| Term life insurance policy rates are very competitive with no cancellation fees and guaranteed locked price for coverage up to $8m | Issue age restrictions Open only for people from 20-60 years old |
| Top rated term life insurance provider and strong financial ratings | Offers online term life insurance only |
| Secured and user-friendly online system and fast underwriting approval | No available riders or supplementary coverages |
| No medical exam term life insurance is available | |
| Adjustable face amount lets you "get up and down the ladder " as you wish | |
Read more: Ladder Life Insurance Reviews
Bestow Term Life Insurance: Best for No Medical Exam Coverage| Pros | Cons |
|---|---|
| Cheap term life insurance policy rates with no cancellation fees for terms of 2, 10 or 20 years | Issue age restrictions, by age 66, the policy issued expires immediately |
| Not working on commissions so that won't try to sell your more expensive policies | Doesn't offer many coverage options |
| Top rated term life insurance provider and strong financial ratings | Offers only term life insurance |
| User friendly online interface for application and fast approval | No available riders or supplementary coverage |
| Coverage starts from $50,000 | Not available in NY |
| No medical exam term life insurance available | Up to $1m coverage only |
Read more: Bestow Reviews
USAA Term Life Insurance: Best for Military People | Pros | Cons |
|---|---|
| Provides wide range of life insurance options in affordable rates for military people and their families | Available to USAA member only |
| Top rated term life insurance provider and strong financial ratings | Medical exam is required |
| User friendly online interface for application and fast approval | Does not offer policy for final expenses |
| Sky-high coverage of up to $10M with Survivor Relations Team |
Read more: USAA Insurance Reviews
AARPTerm Life Insurance by NYL: Best for Seniors Over 50 Years Old| Pros | Cons |
|---|---|
| Cheap No Medical Exam Term life insurance for 50-74 year old seniors | Premium rates increase as you age every 5 years |
| No waiting period | |
| Strong financial ratings | Limited death benefit of $10,000 to $100,000 that terminates when policyholders reach 80 years of age |
| Secured, simple and user-friendly online application and fast underwriting and approval | Does not include a savings or investment component |
| Offers wide array of life insurance products | Open for AARP members only |
Read more: https://www.aarp.org/benefits-discounts/all/nyl-life-insurance/
| Pros | Cons |
|---|---|
| Provides wide range of life insurance policy options | Online term life insurance quote is not available for all products |
| Strong financial ratings | Conversion of term life insurance has confusing limits |
| Term life insurance quotes no medical exam and term insurance with return of premium available | Limited and confusing whole life insurance products |
| Term life available up to 35 years | Poor customer ratings and too many complaints for such a big company |
| Among the best rates | Relies heavily on agents |
Read more: AIG Insurance Reviews
AAA T erm Life Insurance: Best for Bundle Discounts | Pros | Cons |
|---|---|
| No medical exam term life insurance coverage of $25,000 to $500,000 and $100,000 to $5M with medical exam | Not licensed in New York |
| Top rated return of premium insurance and strong financial ratings | |
| Secured and user-friendly online system and fast underwriting approval | |
| Bundle discounts available with home/auto policies |
Read more: AAA Insurance Reviews
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Companies like this make you wonder why you can’t give less than one star. Their representative took weeks to contact me and then had poor communication about what they needed for my claim, taking weeks again between replies. I still haven’t heard from them in end of May 2023 for a claim in February. 0/0 terrible company.
They offer Apple care plus as well and they are the worst ever , total scam folks ..
AIG worst nightmare ever do not purchased anything from this company they will deny your policy and still take money out of your account causing overdraft fees to your account and replying well you need to send proof of fees we don’t see anything on your account it’s closed . I can imagine if I had died I’m sure my daughter would have been disappointed because she would not have received a Dime . Theses people are just like the thieves in the streets just not using a weapon. Professional Thieves
Excellent prices and customer service, and a very straightforward online shopping experience.
Incredible experience from quote to claims!
Not all those who wander are lost.
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