I am currently 30 years old and in excellent health but since I am getting ready to start a family, I want to be prepared for the future of my loved ones. After reading about different life insurance options, I am deciding to go with Term Life Insurance for 20 years.
Is it true that Term Life Insurance premiums don’t change throughout the life of the term? If so, shouldn’t I sign-up now while my annual payment will be low and locked in at this rate?
My employer offers a very small life insurance benefit that I am already a part of but I want more just in case.
While I am asking, are there any circumstances where a payout won’t be made if I were to die under a term life insurance plan? Is it guaranteed? What if I (God forbid) get Cancer or have a heart attack?
Thanks in advance!
Wow, what an amazing set of responses. Thank you!
To add to my details, I do work and make k annually. My wife just got laid-off so is temporarily unemployed.
mbrcatz 9:03 am on June 16, 2010
Should you buy a circular saw at Home Depot, before the prices go up?
Life insurance is a financial tool. Do you have a JOB, you need the life insurance to get done for you? Sounds like not yet, but maybe soon.
It’s true, that level term insurance, the premiums stay the same (except in extremely rare circumstances) for twenty full years. You’d want to add a guaranteed renewable and convertable rider to it, also.
I don’t know that you’ll see a huge premium change between this year, and two years from now.
If you buy a standard term policy, typically, it won’t pay out the first two years if you suicide, or if you lied on the application about something.
Kevin H 9:03 am on June 16, 2010
If you are starting a family you may want to consider looking at the 30 year term. The twenty year term will expire before your children finish college – which may be your biggest expense.
As for timing – its best to get coverage when you are healthy. Once you become sick you may have to pay more, or miss out on coverage all together. The younger you are when you apply, the lower your premiums over the course of the term.
Balance the above with the needs of your existing loved one – your spouse. To what extent does your spouse rely on your income? If the answer is "very much" you may need coverage now.
The policy provided by your employer may not be portable. That means when you leave the employer, your coverage may end.
Insurance Pickle.com 9:03 am on June 16, 2010
If you’re going to buy a term insurance policy then at least buy the right one. The odds that you won’t need coverage in 20 years if you haven’t yet begun to start your family is slim. In other words if you buy a life insurance policy now for a 20 year term and have a child in 5 years, do you expect this child to be self-supporting when they’re 15 years old?
Buy 30 years or longer.
MP 9:03 am on June 16, 2010
Buying term insurance at a young age has another benefit. Many plans will allow you to convert to a whole life product and turn your term product into a permanent product without evidence of insurability. This protects you in case your health were to worsen over the course of the term.
Ana 9:03 am on June 16, 2010
Life insurance is a financial tool that help people have a secure financial futures, don’t just buy the product base on the price but base on the value that can brings you to your financial goals.
Starting your protection is good, but I would recommend that you go talk to a insurance financial professional for a proper planning. And also if you are buying life insurance I would recommend New York Life, because they are a very reputable insurance company with the strongest financial rating from the four major financial rating institutions. New York Life Agents are professionals trained in dealing the overall financial products, specially life insurance. They will walk you through the financial planning process, helping you figure your financial goal and how to get there. I happen to be one of them.
If you don’t want to talk to an agent yet, I would glad to help you out if you have any questions about insurance.
And to answer your question above:
Term insurance are level premium for a fix period of time, and it will increase after the fix period of time expire. And it doesn’t lock in the low rate.
With the Term insurance you will be protected as long as you pay the premium, so they will have to pay out the death claim, except suicide and lying about your health information they might decline your claim in the first 2 years, after that you are lock in. But if you lapse the policy you have to provide proof of insurability in order to reinstate your policy.