Factors Contributing To Term Life Insurance Rates

Term life insurance as the name suggests is the policy which provides coverage for a limited period. The time period for this type of coverage is decided by policy owner only.

The main reason why different term insurance rates are there for different people is because once the policy for term have been used up, no payout is received for the policy. If you take term life insurance rates at a young age you would be able to get very cheap term life insurance rates than if you were older.

The actual or total cost of term life insurance rates is also very tricky. Some term insurance prices appear to be higher but they may be cheaper if taken into consideration the actual cost over time. There are policies like annual premium insurance policies which require that premium be increased every year leading to high actual cost compared to level term insurance policies where premiums remain the same, even if the initial premium for the level term policy may be higher.

Along with that there are various factors which affect which influence life insurance rates. Some of them are mentioned below:

• People who consume tobacco are twice as likely to die as someone who don’t consume tobacco during insured period. Insurance companies take this account when insurance premium rates are determined. So by quitting smoking, tobacco chewing one can save up to 20-30 percent of your term life insurance.
• If one is suffering from terminal illness or disease, it would be really difficult for that person to get term life insurance. Even if he/she gets the term life insurance the insurance premium amounts would be sky rocketed.
• If a person is working in a dangerous profession it would be difficult for that person to get term life insurance and even if one gets term life insurance the rates for the term insurance would be high.

Term life insurance rates vary a lot depending on various such factors mentioned above. To make term life insurance cheap what one needs to do is take some smart decisions like quitting tobacco, smoking and working in professions which are not life threatening making it lower down term life insurance premiums.