August 6, 2018

Best Term Life Insurance Companies

Read more about Life Insurance

How can you support your family when you die? Term life insurance may be the answer and it's less expensive than you think. Read on to learn about your options.

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As the name suggests, term life insurance offers coverage for a set period of time. When the policy expires, it won't be worth anything unless it is convertible or renewable.

This may sound like a waste of money. But term life insurance may be the most affordable option since the premiums don't change for the entire term. This gives you no excuse to not protect your loved ones.

Learn whether term life insurance is right for you below.

What Is the Difference Between Term and Whole Life Insurance?
Term life insurance covers you for a set period while whole life offers coverage for your entire life. Whole life insurance premiums are often higher, but your policy has a cash value.

That value is determined by the investments made. A portion of the premium you pay to the insurance company is invested on your behalf. Some life insurance companies even allow you to borrow against the cash value.

By surrendering the policy, you receive the net cash value. But if you expect to surrender the policy, buying term insurance and investing the cost difference can be a better option. Each policy is different, so it's important to discuss the terms with your life insurance agent.

Who Should Get Term Life Insurance?

Do you have children? Are you a stay-at-home parent? If so, you may not think you need coverage. But you may want to reconsider.

If you're the sole breadwinner: Term life insurance can serve as an "income replacement" should you die during the term. Who will pay the mortgage, cars, utilities, and the cost of daily living in your absence?

Don't Forget: Your loved ones have to cover the cost your final arrangements. A term policy can decrease their financial stress during this difficult time.

If you're a stay-at-home parent You have tremendous worth. Stop and think of what you do at home:

  • Watch the children
  • Cleans the house
  • Cook the meals
  • Handle the paperwork for the home

In your absence, someone would have to pay for childcare, a house cleaner, or other services. A life insurance policy on her could keep the house running smoothly.

If you are married without children: Life insurance could help your spouse in the event of your death, especially if they're dependent on your income.

If you have a mortgage or other large liabilities: Can your family continue to pay the mortgage or will they be forced to move and start over?

Carrying a term life policy at least until the mortgage is paid off can give them a little financial security.

What to Look for in Term Life Insurance

Term life insurance offers many options out there, but not all policies are created equal. Knowing what to look for can save you money and headaches.

  • The Financial Rating: An insurance policy is only as good as the company that provides it. Paying for a policy with a company that has no money won't help your loved ones if you die.

    Look for companies with good financial ratings, such as a BBB or better from A.M. Best.

  • A Variety of Options: You want an insurance company that offers many term life insurance options. Look at the various terms and riders that you have to choose from.

    For example, do you want to have the option to convert your policy to a whole life policy upon expiration? You'll need a company that offers that option.

  • Understandable Terms: Don't take out a policy that you don't understand. This may end up in disaster if your family ends up having to use it.

    Ask your agent a lot of questions before you buy. When the policy is delivered, read it. You have at least ten days to review the policy and get your money back if you decide you don't like the contract.

  • Good Customer Service: You want a company that you can call day or night with your questions. Read up on the reviews about a company's payout when someone has had to use their policy.

    Also, check to the available resources, such as online chat, the claims process, and turnaround times.

What Is a Good Price for Term Life Insurance?
A good price for term life insurance depends on many factors, including age, gender, general health and habits.

If you are a female, 50-year-old smoker, your "good" rates will be higher than a 25-year-old non-smoking female.

On a $1 M policy, a 30-year-old woman will pay an average of $49 per month. A 30-year-old male pays an average of $60 per month.

Best Term Life Insurance

The best term life insurance companies provide coverage at affordable prices with great customer service, understandable terms, and a variety of options.

Best Term Life Insurance for Seniors

State Farm
The older you get, the more expensive term life insurance becomes. Insurance companies base their premiums on the risk of having to pay out on a claim.

As you get older, the risk becomes greater, which means the premiums get higher. Some insurance companies don't even offer term life insurance to seniors. State Farm does, though.

You Should Know: State Farm has an A++ financial rating from A.M. Best.

State Farm offers a Select Term policy, which is great for seniors.

  • Those betwen 45 and 65 years old can opt for a 10- or 20-year term.
  • Those over 75 must choose the 10-year option.

The premium is fixed for the term of the policy. What we love, though, is the ability to renew the premium annually up until the age of 95.

Of course, your premiums will increase accordingly, but if you have debts you want covered in the event of your death, this may be a good option.

TIP: Consider converting your term life insurance to permanent coverage regardless of your state of health.

State Farm offers that option but certain restrictions may apply, depending on your state's laws.

Best Term Life Insurance for Young Adults

The younger you are, the less expensive life insurance premiums may be.

Today, even young adults who aren't married but have shared liabilities are looking for life insurance. AIG offers plenty of options.

Current clients claim that AIG made the life insurance process simple and affordable. AM Best gave AIG a rating of BBB, which makes them a good risk for paying their obligations.

What's the Best Age to Get Life Insurance?
Answer: As soon as you can afford it. Twenty-five-year-olds are the prime candidates for life insurance. But many hold off until they are 35 or older when they feel more well-established.

When you own a home, get married, or have children, it's time to protect yourself and your loved ones. If you have private student loan debt, life insurance can protect your co-signor if you die. (Federal student loans are forgiven when the student dies.)

AIG offers term life insurance policies for terms between 10 and 30 years, in increments of 5 years. The company also offers a variety of insurance policies, giving you options.

The most popular plan is the Level Term Insurance for young adults. This offers the most affordable premium that remains "level" for the term.

AIG does offer renewable and convertible policies as well, which may help you in the future as your needs change.

Best Term Life Insurance for Smokers

Smokers often pay as much as three times the rate of non-smokers. Banner is among the few insurance companies that cater to the "smoking niche," offering affordable insurance rates for them.

Banner received a rating of AA- from A.M. Best. While they do require a medical exam to get their life insurance, they may not decline you or charge you sky-high premiums just because you smoke.

Banner also offers a variety of options, including renewable and convertible policies.

Read the Fine Print Before Converting: Some policies have a specific window of opportunity regarding when you can convert your policy.

Best Term Life Insurance with No Medical Exam Required

Haven Life:
Some people get stressed out at needing a medical exam for life insurance approval. Many companies require the medical exam to determine your "risk of dying," which will affect your premium.

Thanks to today's technology, Haven Life has come up with a way to provide no medical exam insurance without the high premiums. This insurance is only for people up to 45 years old who are in good health.

You apply just as you would normally, completing an online application. From there, the InstantTerm process verifies the information in your application from various third parties.

You'll have an immediate answer regarding your coverage and you won't have the sky-high premiums.

You Should Know: This is not traditional no medical exam insurance. People with medical issues that would prevent them from getting insurance may have to opt for the Guaranteed Life Insurance.

As this name suggests, you are guaranteed coverage, but it's likely limited to a smaller amount, such as $50,000. It also comes with higher premiums.

Best Term Life Insurance for Those Over 50

If you waited to get life insurance and now have debts to cover or loved ones to protect, it's not too late. Transamerica offers accordable policies for those over 50 years old with many benefits.

The company offers a life insurance policy with accelerated death benefits. Should you become chronically ill, you can use some of your benefits to pay for care while you are still alive.

You Should Know: Transamerica has an A.M. Best rating of A+.

Transamerica offers policies in terms between 10 - 20 years in 5-year increments (they offer 25- and 30-year terms for younger adults too). The coverage ranges from $25,000 and $1 million.

You can also choose how your beneficiaries receive the payout, either as a lump sum or in installment payments.

Other Insurance Companies to Consider

  • Met Life: Met Life is one of the oldest names in the industry.

    With an A+ rating, Met Life offers a variety of term life options including a Simplified Life policy that doesn't require a medical exam.

    Met Life is known for their relaxed underwriting guidelines, especially for those with diabetes or high blood pressure.

  • Northwestern Mutual: Northwestern Mutual tends to offer lower rates than other companies to seniors and smokers.

    They do offer the ability to convert your policy under certain circumstances. But they don't offer an option for a "no medical exam" policy.

  • New York Life: New York Life specializes in whole and permanent life insurance policies, but they do offer term life insurance too.

    If you are looking for a term no longer than 20 years, they may have a policy for you. New York Life also offers a Family Protection Term, which includes policies for your children under the age of 18.

Bottom Line

Chances are, you need some type of life insurance. But what you need depends on circumstances that can change throughout your lifetime.

An independent agent can sell policies from more than one company. This flexibility can help you find the best policy for your situation.

If you feel anything an agent misrepresents the facts or acts impatient with your questions, find someone else to handle your business.

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