Price will naturally be an important factor when buying term life insurance. But it’s important to also look at features and benefits a policy can give you after you buy it. Here’s how to find the best term life insurance for you.
Compare quotes from multiple life insurance companies
The lowest-priced term life insurance options for you can vary based on your age and health conditions. It’s important to compare term life quotes from multiple companies to get a sense of what a good price is for your profile. If you have health issues, work with an experienced life insurance agent who can identify insurers most likely to give you the best rates. Smokers, marijuana users and others with “risks” (such as DUI conviction) can also benefit from working with an experienced life insurance agent.
Ask about the policy’s accelerated death benefit
Most life insurance policies these days include an accelerated death benefit rider at no extra cost. If you’re diagnosed with a terminal illness after you buy the policy, you can use this feature to access part of your own death benefit. You can use the money for any purpose. Upon your death, your beneficiaries receive a payout that’s reduced by the money you took out. Ask how much death benefit you can access, and what the rules are for qualifying for using the accelerated death benefit.
Ask if there are other living benefits
Some of the best term life insurance policies will also provide critical illness and chronic illness benefits. If you qualify based on your condition, you can take money from your own death benefit.
Ask about term life conversion
Converting a term life insurance policy essentially means that you trade it for a permanent life insurance policy from the same insurer, such as a whole life insurance policy. The best term life insurance companies will give you some choices of permanent life policies. Check the rules for conversion. You usually must make a conversion during your level term period, and most companies also have an age cap—whichever comes first is your deadline for converting.
Find out the rules for renewing the policy
Once your level term period ends (such as the initial 10, 20 or 30 years), you usually have the option to renew the policy every year after that, up to a certain age. Each year, renewal will likely be at a higher rate, and you might find the renewal rates to be unaffordable. So don’t count on renewing when you buy the policy. Instead, try to buy a term length that’s best for your needs.
Determine how much life insurance you need
Use a life insurance calculator to help determine how much life insurance you need. There are many free calculators online. Generally you want to add up your financial obligations (such as a mortgage, income replacement for your job) and subtract funds your family could use if you pass away (such as existing life insurance and savings).
