Experts will advise you to buy term life insurance if insuring your life is your main intension. Term life provides maximum financial security at a minimum rate. All the money you pay as premium goes to buy life coverage for your family. There is no hidden cost, no diversion of fund. Neither there is any hidden clause and although you should read the fine prints carefully, you at least do not need any expert advice. All is clear-cut. However, it is essential to learn about few basic points to be able to gain the maximum advantage out of it. Many people do not like term life because:o It is valid for a limited term whereas whole life insurance policies are valid for their entire lifespan. However, staying covered for thirty years is enough if we learn to manage our resources intelligently. o Another point that the proponents of whole life insurance harp on is its cash value. The whole life builds up cash value, which you can take out by surrendering the policy after a stipulated period. Moreover, accretion of cash value allows you to take loans against such a policy. Term life does not have any cash value. If you do not die within the term, you do not get any return on the money you paid as the premiums.In fact, many people prefer whole life insurance policies because they like the way it unites insurance with investment. You live or die, you are sure to get return on the money you pay as premium. However, if you look closely, you will find that they are using a part of the premium you pay to build up your capital. The money earmarked for insurance purpose is lost if you take out the cash value and if you die your beneficiary does not get the investment amount. He gets only the face value. Therefore, instead of buying costlier whole life insurance, buy low cost term life insurance and invest the difference in some saving scheme to look after your investment need. These factors do not make whole life insurance a very affordable or intelligent insurance option, unless, of course, lifetime coverage is a priority with you. Otherwise, one could choose from 1 year to 30-year terms depending on the individual needs. To make an informed decision, however, it is important to know your life expectancy. To calculate the same, you can make use of online estimation tools designed for the very purpose. You can hope to get more affordable term life insurance cost with the knowledge of life expectancy. Life expectancy depends on your age and health condition but a number of other factors are also used in making a reliable estimate of the same. These factors include your lifestyle and habits which are taken into account to make sure there is nothing which affects your life expectancy adversely. For instance, if one should be a smoker, it can affect life expectancy and hence it can make difficult to get low cost term life insurance. The insurance rates are increased proportionately to part compensate for the risk taken by insurance company by insuring a smoker. This is because a smoker is more likely to suffer form respiratory diseases and lung cancer among other conditions as opposed to a non-smoker. However, it would not be wise to hide such a habit from your insurer because if you should die of a smoking-related illness, the coverage could be denied by the insurance firm. Instead, it is much better to keep your insurer well-informed and bargain for affordable term life insurance cost. In the same manner, nature of occupation also exercises an important influence on the kind of insurance rates you might get. If someone is in an occupation which exposes him to a higher level of risk than an average office-goer, it could affect the life expectancy in some measure. The insurance rates would also climb up proportionately to account for the risk factor involved. It is always useful to buy early in life if one wants to get low cost term life insurance to meet his individual insurance needs well enough. However, health condition is also an important issue and in certain cases even young people with health complications might end up with an expensive life insurance policy. As far as other aspects of the policy are concerned, you can easily choose a suitable term duration and just the right amount of coverage with the knowledge of life expectancy. Here, the importance of planning before buying insurance cannot be overemphasized. It is also important to manage your policy intelligently to make sure your dependents will be financially secure after your death. It can also be a good idea to increase amount of coverage to the nearest threshold level to enhance the level of financial security for your dependents while lowering term life insurance cost at the same time.
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Do not try to hide that you smoke. If you die from smoking-related illness, the carriers may withhold claims. Some carriers take up such issues more objectively and provide coverage at relatively low term life insurance cost. Look for them instead.
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