Term life insurance comes in several variations. There are a number of variables to consider when you are comparing options and deciding on a plan. Below, we’ve listed the main things that you must consider when “shopping” for a term life insurance policy.
- The first variable that you must consider is how much insurance you want to obtain. Typically, this is done in round dollar amounts – i.e. $100,000, $250,000, $500,000, $1,000,000. However, you can get typically apply for any amount, and sometimes, if you are seeking to cover a specific debt amount, individuals may purchase in that exact amount. Obviously, this amount, called the “face amount”, will determine in part what the premiums will be for your policy.
- The second variable that you must consider is the term, or duration, of the policy. With term life, you purchase a policy that covers you for a specific “face amount” for a specific duration. Typically, the durations of these policies are 5, 10, 20 or 30 years, although it may be possible to find “terms” for a different amount of years.
- Once you decide these two variables, or at least get an idea of what you are looking for, it is time to compare – or “shop”. This, incidentally, can easily be done online on our website (term life comparison) or any one of many others. When you obtain these rates, it is time to compare the actual term life insurance companies. There are many companies that offer term life insurance – some you have heard of, and some you have probably not heard of. But the most important things to consider are the premium for the term and face amount you are looking for and the rating of the insurance company.
- At this point, you are ready to move from the “shopping” stage to the purchasing stage. This is very easy to do and can be done all online by filling out some very basic, straight forward information. With most plans and companies, there will be medical underwriting, so medical information will be required and obtained. You should expect it to take anywhere from two weeks to a month or more for a company to process a term life insurance application.