The Price of Life: Term Life Insurance Rates

In my business ethic class, my professor said that the reason why most people dislike Jeremy Benthams utilitarian approach is because they do not believe that all things in this world have values attached to it, especially if its monetary. But in this time and age, one do get to think that even if its not all, then its definitely most things come with a price. And when you talk about the oh-so-elusive-life and its price tag, then you definitely have to talk about insurance and their respective rates. In this case, term life insurance rates to be more specific.

Term life insurance is defined as the type of life insurance that you pay for in a specific period of time. If, within the time period allotted, the insured person dies (knock on wood!), then the beneficiary will receive death benefits. For most term life insurance holders, death benefits are fixed stipulations but a few have added complications. The benefits of the term life insurance you took may, for example, increase towards the end of the term or vice versa. Of course, benefits are proportional to the rates of your term life insurance. If, however, nothing (fortunately or unfortunately?) untoward happens when the policy expires, you are not allowed to make any other claims thereafter.

There are two types of term life insurance: yearly renewable term and level premium term. The first type of term life insurance, yearly renewable term, requires the insured to pay a gradually increasing amount to the company as they near the end of the policy. On the other hand, the second type of term life insurance allows the insured to pay a fixed amount for a certain period of time before the amount gradually increases till they reach the given maximum or end of contract. The rates of course differ for each type.

The rates of term life insurance may be significantly lowered if you take note of one essential fact: since the rates are formed to calculate the financial risk that the company takes for each person they insure, you can make the rates decrease if you do something that can make you healthier or live longer.

First, you can check out your medical histories. Its been SOP for companies to base the rates they provide you with on your medical history. So if your health records show you to be robust and generally beautifully preserved like Cher, chances are youd be given lower rates.

Second, and somewhat connected to our first tip, is to subject your health profile to approval. Show them that youve got low blood pressure, low sugar level, low nicotine and liquor intake and low cholesterol levelall things low are generally good and can contribute to decreased term life insurance rates just as long as its not to the extreme.

And lastly, you can take advantage of your age. Usually, the younger you are, the lower the risk the company assumes and the more likely theyll be giving you lower rates.

At times, term life insurance is pitted against whole life insurance. While term life insurance is aka temporary life insurance, whole life insurance is, you got it, permanent life insurance. If youre cash-strapped, then term life insurance is ideal because the rates are lower. If, however, youre rolling in dough, then whole life insurance is more preferable since it offers more benefits than term life insurance.