Shopping for life insurance is hard enough what with all the different types of policies available and then it comes time to find the best rates. Researching life insurance inevitably proves that term life insurance is the most affordable; however, this doesn’t mean that all term life insurance companies are going to offer the best rates. This makes it important to know what the average term life insurance rates are and where to find them.
Obtaining the Quotes
There isn’t a much better way to come up with the average life insurance rates than to request multiple quotes. This is simply because quotes vary from person to person based on many different criteria. The Internet has made it possible to request multiple quotes quickly and easily. In fact, there are some websites designed specifically to intake a person’s information and return them with quotes from many different carriers. Running the quote is simply a matter of answering some questions and possibly using the sites planning tools to help with the decisions. The basic quote is made up of some typical questions such as:
- Age
- Gender
- State of residence
- Basic health questions: Typically these concern major illnesses or disease and will help the insurance company determine if further information is needed.
- Term of policy: This is the length of the policy that is being quoted. Most of the life insurance websites that offer quotes have a planning tool to help determine the best term based on the financial situation of the applicant.
- The planning guide will basically use information based on the length of the applicant’s mortgage, number of children who will need college funds and other financial aspects.
- Amount of the policy: This is another area where the insurance planning tool will come in handy. The tool will use the same basic information that it gathered to determine the term along with questions about income, mortgage payments and other questions to come up with the best face value.
Once these questions are answered, the information is submitted to multiple life insurance companies. These companies will then provide a preliminary quote that can be used in the decision making process. Since there are no hard and fast averages for term life insurance, the applicant can use all of the quotes they receive to determine what their personal average rate is and use this as a guide when deciding which policy is the best financial decision for them.
Points to Consider
The average term life insurance rates that are returned for each company are based on the information that is provided during the quote. Unless the quote is for a guaranteed acceptance policy, the applicant must be completely honest during the application process because the insurance company will investigate medical records and the premiums may increase greatly if they uncover a medical illness that was not disclosed on the application.
The rate of the policy typically does not change once it is locked in; however, this is something that must be discussed and all fine print read before signing the policy. Some policies are designed to only increase in age increments while others have a locked in rate for the term of the policy.
Term life insurance, like whole life insurance, is much less expensive if the policy is taken out when young. This is something that all young families and individuals should consider when looking at term life insurance.
Factors Affecting the Average Term Life Insurance Rate
It is difficult to determine what an average term life insurance rate is without knowing specifics for the applicant. This is why agents aren’t able to give a solid quote to anyone without a completed application. Some of the factors that make the policy rates vary from one person to another include:
- Age: Older individuals pay more for life insurance than younger ones.
- Employment: High risk jobs, such as bridge builders, may have higher premium rates than an office worker.
- Recreational Activities: Many people don’t understand why an insurance company would ask about their hobbies; however, someone who enjoys parachute jumping has a higher chance of death than someone who cross- stitches.
- Vices: Smoking, drinking and other vices can increase policy rates.
- Health conditions: This is simply the way of the insurance world. Health conditions have a distinctly adverse affect on the rate of life insurance.
When shopping for quotes make sure to keep these things in mind and weigh them when looking at the policies. It may be possible to get a policy that excludes death from a high risk activity and thus has a lower rate.
Ultimately, there are no hard and fast average term life insurance rates; everyone’s average is going to be based on their own set of conditions. However, by requesting multiple quotes, an average can be calculated for the applicant and used as a guide while shopping for insurance.
