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Cheap Term Life Insurance: Here’s Everything You Need to Know

Cheap life insuranceAccording to a recent study more than 40% of Americans are without any form of life insurance.

The number one reason we go without the protection our families need? Perceived cost.

But, would it surprise you to learn that we overestimate the cost of life insurance by almost three times? In fact, the cost of a term policy is probably less than you spend on coffee in a month.

This article provides some insider’s secrets to help you get the best value on a cheap term life insurance policy. We’re here to help you save money, but that doesn’t mean buying a stripped-down policy from an unreliable insurer.

Quick Article Guide:

  1. What is Term Life Insurance?
  2. Why Term Life Insurance?
  3. Buy Term and Invest the Difference
  4. Key Factors
  5. Get a Medical Exam
  6. Common Mistakes
  7. How to Get Cheap Term Life Insurance

What is Term Life Insurance?

Term insurance is one of the most common forms of life insurance on the market. It provides a level death benefit for a fixed number of years, usually 10, 15, 20, 25 or 30 years. During your policy’s term, your rates are guaranteed not to change, even if your health takes a turn for the worse.

If you pass away during the term, your beneficiary or beneficiaries will receive your life insurance policy’s death benefit, or face amount, as a tax-free lump sum. This money is usually paid in full within two-weeks, but it can also be paid out as an annuity if you choose.

A life insurance beneficiary can be:

  • Your spouse
  • Domestic partner
  • Your child or children
  • A family member
  • Grandchildren
  • A business partner
  • A lender
  • Anyone that could suffer a financial loss if you pass away.

Most life insurance policies allow for multiple beneficiaries, but if you are buying a large amount of coverage (usually more than $50,000-$100,000 for an individual), the insurance provider will probably ask about the financial hardship your beneficiary might encounter.

Reason for buying a life insurance policy could be:

  • Debt – A mortgage, medical bills, car notes, burial costs, business loans, etc.
  • Income Loss – Does anyone rely on you for financial support?
  • Business Loss – Would your business suffer financial hardship without you?
  • Inheritance – To leave money behind for college expenses, a first home, etc.

When deciding the term of your policy, make sure you select a term that is long enough to surpass the life events you are trying to protect. In other words, if you want to protect your mortgage, make sure you select a term that exceeds the number of years remaining on your mortgage.

While you may be tempted to buy the shortest term available to save money, in the long run, this strategy often backfires. The cost your life insurance will likely triple in ten years – if you are lucky enough to remain in insureable health.

If you have more than one major life event you want to insure, consider layering your life insurance by buying multiple term policies to save money. You can also purchase a policy that allows you to decrease your death benefit if you pay off your mortgage sooner than expected or your needs change.

Here’s a look at some sample term life insurance rates for an to help you estimate the cost of a policy:

Age$100,000 (Male)$100,000 (Female)$250,000 (Male)$250,000 (Female)$500,000 (Male)$500,000 (Female)
40$8.29$7.89$11.63$10.81$18.12$15.72
45$10.77$9.91$16.81$15.15$27.62$24.30
50$14.07$12.56$23.66$20.34$41.49$35.06
55$19.35$15.50$37.83$29.26$69.66$51.94
60$28.39$23.26$59.85$41.91$112.00$75.00
65$42.36$33.26$96.70$66.48$187.26$123.55
70$79.37$55.48$173.69$107.62$321.93$198.52
75$133.80$96.26$325.29$217.81$644.45$420.46

*Displayed monthly rates are accurate as of 03/29/19 and are provided for illustrative purposes only.

Age$100,000 (Male)$100,000 (Female)$250,000 (Male)$250,000 (Female)$500,000 (Male)$500,000 (Female)
40$10.83$9.83$17.51$15.34$28.74$24.68
45$15.58$12.78$27.78$22.43$48.60$38.40
50$20.75$16.46$40.44$30.90$73.52$54.87
55$29.93$22.50$63.27$47.04$118.29$85.49
60$49.62$36.65$109.78$77.16$203.75$138.51
65$89.00$62.05$206.28$135.95$392.01$255.63

*Displayed monthly rates are accurate as of 03/29/19 and are provided for illustrative purposes only.

Age$100,000 (Male)$100,000 (Female)$250,000 (Male)$250,000 (Female)$500,000 (Male)$500,000 (Female)
40$15.39$13.27$29.28$24.37$51.65$42.19
45$21.67$18.07$44.28$35.17$80.07$62.66
50$33.78$25.73$69.83$52.20$129.02$96.12
55$55.22$37.63$123.63$84.88$238.28$163.63

*Displayed monthly rates are accurate as of 03/29/19 and are provided for illustrative purposes only.

To obtain an accurate rate based on your age, please request a free online quote below to instantly compare rates from dozens of top-rated life insurance providers, or call us at: 855-247-9555

Why Term Life Insurance?

why term lifeAs we get older, pay down our debts and see our children through college, our need for life insurance decreases. If we still need coverage when we reach retirement age, it’s usually minimal.

This one of the many reasons we recommend term life insurance over whole life insurance. Whole life policies can be extremely rigid and difficult to understand. They often include a “cash accumulation account,” but most agents won’t tell you is a mere living benefit and not a death benefit.

With that cash value also comes more legwork and thus a higher commission paid to your agent, making whole life insurance somewhat of a “sell” in the agent’s favor. But most of these policies are not without risk, especially if the market performs poorly.

Furthermore, many whole life policies have a minimum 10-year “surrender charge,” meaning you essentially have to pay the agent’s commission (easily thousands of dollars) for that timeframe should you choose to cancel the policy. Some even have a 15-year surrender charge.

Term life insurance, on the other hand, gives you the same coverage you seek in a whole life policy, without the fine print and extra fees. The benefits of term life insurance include:

  • Affordable coverage
  • Flexible options
  • A fixed rate for a set period of time
  • No startup costs
  • No surrender charge
  • No hidden fees
  • The freedom to cancel or change your policy at any time

Unlike whole life insurance, term life insurance allows you to determine your needs and reverse engineer your coverage. This allows you to be sure that you’re getting the exact protection you need—nothing more, nothing less.

Most importantly if your term policy offers a conversion rider, if you will still need some life insurance after your policy ends, you can convert a portion of your existing insurance coverage into a permanent life insurance policy.

What’s great about this option is that you do not need to requalify for the your insurance. You are guaranteed to be approved the same rate class you initially qualified for, regardless of your current health or lifestyle.

Buy Term and Invest the Difference

Many financial experts recommend term life over whole life insurance. “Buy term and invest the difference,” they’ll say—and they’re absolutely right. When you buy term life insurance, you can take the money that you would have been paying on whole life insurance and put it into stocks, bonds, or any other investment vehicle.

This strategy enables you to bolster your financial leave-behind, while the cash accumulation in a whole life policy would default to your insurance company and not your beneficiary.

Key Factors

Your ability to find cheap term life insurance will depend on your health background. Insurance providers look at all of the following:

  • Age
  • Height-to-weight ratio
  • Cholesterol
  • Blood pressure
  • Pre-existing health conditions
  • Medications
  • Smoking
  • Alcohol consumption
  • Family medical history

You shouldn’t try to figure this equation yourself. It’s important to work with an experienced independent agent who can not only tell you what you need to know, but also shop multiple carriers to find you the best rate.

Likewise, as we mentioned earlier, you shouldn’t choose the cheapest option by default. For example, if you have a two-year-old child and are shopping for a 20-year policy to provide coverage through their college years, you might be presented with a cheaper 10-year policy.

If you buy that 10-year policy, there is no telling what your health will be like when it expires, and you could very well find yourself paying substantially more for a new policy.

Get a Medical Exam

If you are over the age of 50, you can probably a better rate by on your life insurance if you complete a medical exam. The caveat here is that if your doctor discovers an undiagnosed health issue, such as diabetes or high cholesterol, you could see higher rates.

medical examBut assuming you check out fine, the medical exam is your ticket to quality, affordable coverage. Besides, you would want to know about a potentially serious health condition in the early stages so you could seek treatment, right?

If lying about your health crosses your mind, squash the idea here and now. The Medical Insurance Bureau (MIB) keeps track of all your records (just like a credit report does) and shares this information with insurance companies to prevent fraud.

Put simply, it’s better to be honest and upfront with your life insurance agent. Every company sets their own underwriting guidelines and rates. By letting your agent know about your health issues upfront, they’ll be sure to apply you with the best company for your unique situation.

Common Mistakes

There are several mistakes that people make quite frequently when searching or applying for life insurance. Here are a few mishaps to be aware of:

Working with a “Captive” Agent

Agents at big insurance companies are only able to sell their company’s product, limiting their ability to find competitive rates and reliable coverage. Again, you’ll want to make sure you work with an independent agent who can shop multiple A-rated carriers.

Taking Advice from a Friend or Family Member

By all means, if someone you know recommends a policy or provider, you should listen. However, you don’t want to turn around and purchase the first option you learn of.

Every insurance provider has 16 different rate categories based on a slew of variables in addition to the factors we’ve discussed. The best deal for someone else might not necessarily be the best deal for you.

Not Taking the Medical Exam Seriously

You don’t need to wake up at 3 a.m. in a cold sweat over your life insurance medical exam, but you should try to get yourself in optimal shape beforehand. And here’s a pro tip: avoid pain pills, supplements and vitamins 24 hours before your exam. These have an effect on liver enzymes that can decrease your score and increase your life insurance rate.

Not Getting a Convertible Policy

You should always get a policy that’s convertible to permanent life insurance. If your health takes a turn for the worse during your term, you want to be able to increase and extend your coverage without having to re-qualify.

Mishandling a Telephone Interview

Sometimes a life insurance company will conduct a telephone interview as part of their inspection report. If this happens to you, make sure you find a quiet place where you can take the call and focus on answering the questions asked. If you’re scatterbrained during the call, you might be subject to extra red tape before being approved.

How to Get Cheap Term Life Insurance

we can helpNow that you know the ins and outs of term life insurance, it’s time to find a cheap term life insurance policy that protects your family from potential financial hardship.

JRC Insurance Group specializes in term life insurance, shopping more than 50 different providers to help you find your ideal policy at an affordable rate.

Every year you wait to buy life insurance increases your premiums increase. If you want to buy cheap term life insurance, you need to get started today! You can request a free quote online or call us toll-free at 855-247-9555.

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Cliff Pendell

VP of Marketing at JRC Insurance Group
Cliff is a Managing Partner and Co-Founder at JRC. He has helped thousands of families of businesses with their life insurance needs since 2012 and specializes with applicants who are less than perfect health. In his spare time he enjoys spending time with family, traveling, and the great outdoors.
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